Whenever you turn on the TV, you hear about every sort of new study out there. You hear about that new supplement that prevents 99% of cancer, you hear about the retirement plan that more than 99% of Americans are using, and more absurd things. We all know that the claims above are false. But some statistics that we see aren’t as absurd as the examples above. Then how do we know which statistics to believe and which to not believe? In Naked Statistics by Charles Wheelan, he goes very in-depth about statistics and the things you should know about before you believe a data.
When you talk about someone, what is the standard for having a good personality? Let’s say there is a guy named Tom. Tom’s a empathetic, kind, and funny guy but he can be shy and rude. When person 1 sees Tom at first, person 1 might consider Tom to be rude and mean because he didn’t greet him. Person 2 on the other hand might consider Tom to have a great personality after talking to him for an hour. If Jamie was thinking about hiring Tom and hear about him from Person 1 and 2, who should she trust? The one that says that he is rude and mean or the one that says that he has a great personality? There isn’t a definite answer to this question. Because everyone has different standards for a person with great personality. One may perceive one person to have a great personality but the other may think he is a complete jerk. Instead of focusing on the “deceptive descriptive” statistics, it would be a much better decision to focus on the actual events or facts. For example, instead of hearing about how they perceive Tom’s personality, you can ask about their experience with him. It might be that they volunteered together at animal shelter and he was really passionate about helping other people, or it may be just Tom greeted him at the party. How often do we hear this in our life? Almost everyday. This investment will be great, you should buy this nice car, and so much deceptive descriptions. Now we should learn to actually focus on the actual facts instead of perceived impressions.
“More than 90% of Americans prefer our toothpaste over competitors!” How accurate is this statement in actual life? Do 90% of Americans actually prefer one brand over the other? The truth is that most statistics like this use a sample that represents the group fairly well and use it as a model for the whole. For example, the area surveyed might have been considered the best representation of the whole US. However, you don’t know what the other 99% of the world thinks of the toothpaste. The statistics are focused on the 1% and hope that it was a good sample. From consumer’s point of view, not many people actually know how the study was conducted, so we are inclined to believe that 90% of all Americans prefer one brand and that fact gets ingrained in our head.
Let’s talk about probability. If you purchase a iPhone from the Apple store, what’s the number one thing that they try to sell you? It’s not a headphone, it’s not a sticker. It’s a protective plan for your phone. They charge about $70 and promise that if your phone breaks, they will replace your phone. But how actually likely is it for one to break their phone? Maybe 1/30. It’s not a very likely event for one to break their phone, but when you’re buying the phone and the salesman mentions that they will cover all damages that occur to the phone, one fails to realize that that is very unlikely to happen. This happens on almost every other areas of your life as well whether it be home insurance or security cameras, one tends to focus on the event that is very unlikely to happen but because they hear about what happened on the media or from their friends, people are inclined to think that it might happen to them as well.
When you talk about someone, what is the standard for having a good personality? Let’s say there is a guy named Tom. Tom’s a empathetic, kind, and funny guy but he can be shy and rude. When person 1 sees Tom at first, person 1 might consider Tom to be rude and mean because he didn’t greet him. Person 2 on the other hand might consider Tom to have a great personality after talking to him for an hour. If Jamie was thinking about hiring Tom and hear about him from Person 1 and 2, who should she trust? The one that says that he is rude and mean or the one that says that he has a great personality? There isn’t a definite answer to this question. Because everyone has different standards for a person with great personality. One may perceive one person to have a great personality but the other may think he is a complete jerk. Instead of focusing on the “deceptive descriptive” statistics, it would be a much better decision to focus on the actual events or facts. For example, instead of hearing about how they perceive Tom’s personality, you can ask about their experience with him. It might be that they volunteered together at animal shelter and he was really passionate about helping other people, or it may be just Tom greeted him at the party. How often do we hear this in our life? Almost everyday. This investment will be great, you should buy this nice car, and so much deceptive descriptions. Now we should learn to actually focus on the actual facts instead of perceived impressions.
“More than 90% of Americans prefer our toothpaste over competitors!” How accurate is this statement in actual life? Do 90% of Americans actually prefer one brand over the other? The truth is that most statistics like this use a sample that represents the group fairly well and use it as a model for the whole. For example, the area surveyed might have been considered the best representation of the whole US. However, you don’t know what the other 99% of the world thinks of the toothpaste. The statistics are focused on the 1% and hope that it was a good sample. From consumer’s point of view, not many people actually know how the study was conducted, so we are inclined to believe that 90% of all Americans prefer one brand and that fact gets ingrained in our head.
Let’s talk about probability. If you purchase a iPhone from the Apple store, what’s the number one thing that they try to sell you? It’s not a headphone, it’s not a sticker. It’s a protective plan for your phone. They charge about $70 and promise that if your phone breaks, they will replace your phone. But how actually likely is it for one to break their phone? Maybe 1/30. It’s not a very likely event for one to break their phone, but when you’re buying the phone and the salesman mentions that they will cover all damages that occur to the phone, one fails to realize that that is very unlikely to happen. This happens on almost every other areas of your life as well whether it be home insurance or security cameras, one tends to focus on the event that is very unlikely to happen but because they hear about what happened on the media or from their friends, people are inclined to think that it might happen to them as well.