“Let us remember the unfortunate econometrician who, in one of the major functions of his system, had to use a proxy for risk and a dummy for sex.”

I understand why the second part is funny (a dummy for sex can be understood as a sex doll), but I do not get the first part. I found that a proxy can mean either

  1. the authority to represent someone else, especially in voting; or
  2. a figure that can be used to represent the value of something in a calculation

It was the second meaning that the econometrician had in mind. But how does the first meaning fit in with risk? Or is there another meaning that makes a proxy for risk funny?

  • 1
    "nonperforming assets are a well-suited complement to the Z-score in studies of bank risk". Maybe the econometrician had non-performing assets...
    – JavaLatte
    Feb 1 '18 at 9:51

The "proxy for risk" part is not really meant to be funny. It would be fairly routine to describe an econometrician as "unfortunate" because he was unable to measure risk directly, but had to rely on a proxy (that is, a numerical value that stands in as a substitute for a direct measurement) instead. This would make his thesis less secure because people could question whether the proxy was valid or not.

The joke is that "proxy for risk" is a reasonable misfortune for a econometrician, but "dummy for sex" is has no relation to econometrics. But the two statements have an exact parallel construction, along with the parallel meaning of using a substitute for the real thing: in the first case a numerical model instead of a direct measure; and in the second case a doll instead of a real person.

Jokes are often constructed by directly connecting a reasonable statement with a ridiculous one.

  • Your interpretation is spot-on except for where you say "dummy" has no relation to econometrics. "Dummy variable" is a statistics term for a binary variable (0 or 1) used to code a categorical variable: en.wikipedia.org/wiki/Dummy_variable_(statistics) So both "proxy" and "dummy" have double meanings here!
    – qdread
    Sep 23 '19 at 18:34

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