1. Consulting and Compensation
Statistical Science 9544A
Consulting and Compensation

2. Yuanhao’s issue

3. Two Competing (?) Views
Professor Sir David Cox’s piece of advice number 1 on statistical consulting:
From an article: “Some general remarks on consulting” Liaison 13.1, February 1999.
“If possible collaborate (i.e., work with an investigator over a period of time) rather than consult (i.e., some occasional discussion of very specific statistical issues with the investigator).”
“Free advice is worth what you pay for it.” (several sources)
Time is money. Time is valuable and limited. Every hour given away for free is an hour that might have been used more profitably.
Brain power is expensive. A small fortune is spent developing critical thinking and problem-solving skills (education – formal and post graduation). Therefore brain power should be worth something and the investment in brain power should be protected.

4. Several Approaches to the Issue
the economics of supply and demand
the utility function (or worldview) of the consultant
the worldview of the client
intellectual property

5. “Economics 101”

6. Applications from one viewpoint
Why can I charge a fairly large fee for consulting in a legal context on sampling issues?
supply of PhD statisticians with expertise in survey sampling is limited
demand for these skill in lawsuits is modestly strong
Why does the consulting service in the department charge a much smaller amount?
supply of people with sufficient training to do the work is high
demand is moderate to low

7. How much is $35 per hour? Assume
that the normal working week is 35 hours; and
that you work 50 weeks of the year with 2 weeks of unpaid holidays.
Then your yearly wage is:
35 × 35 × 50 = 61250

8. Applications from another viewpoint
Why I can demand joint authorship on a paper:
supply of statistical expertise to solve the problem is limited
desire for the principal investigator to complete the project is high
Why I cannot demand joint authorship on a paper:
many people could do the analysis
perception by the principal investigator that the intellectual contribution is minimal

9. Where is the consultant is his/her career?
Works
in industry
as a private consultant
in a medical research group
in an academic position
Depending on the person’s position the decision can be based on utility theory.

10. Cash or collaboration?

11. How the client views the consultant

12. How the Statistician is Viewed
How the Statistician is Viewed
Technician
Scientist
Type of
Fee-for-service ×
Activity
Collaboration

13. Intellectual Property
Definition from the World Intellectual Property Organization
Intellectual property (IP) refers to creations of the mind, such as: inventions; literary and artistic works; designs; and symbols, names and images used in commerce.
IP is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the IP system aims to foster an environment in which creativity and innovation can flourish.

14. As the owner of intellectual property you can:
Statistical consultation or collaboration results in the creation of intellectual property on the part of the statistician.
As the owner of intellectual property you can:
sell it
share it
hoard it (Isaac Newton?)
give it away for free
As the owner of intellectual property you need to:
protect it (co-authorship?)
use it to the best of your advantage (publish? charge a fee?)