SlideShare a Scribd company logo
1 of 16
Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do
THE HIDDEN INFLUENCE OF PROBABILITY
AND STATISTICS ON EVERYTHING YOU DO




                    KA I S E R F UNG




 New York Chicago San Francisco Lisbon London Madrid Mexico City
    Milan New Delhi San Juan Seoul Singapore Sydney Toronto
Copyright © 2010 by Kaiser Fung. All rights reserved. Printed in the United States of
America. Except as permitted under the United States Copyright Act of 1976, no part of
this publication may be reproduced or distributed in any form or by any means, or stored
in a database or retrieval system, without the prior written permission of the publisher.


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 WFR/WFR                1 9 8 7 6 5 4 3 2 1 0


ISBN 978-0-07-162653-8
MHID     0-07-162653-0

McGraw-Hill books are available at special quantity discounts to use as premiums and
sales promotions or for use in corporate training programs. To contact a representative,
please e-mail us at bulksales@mcgraw-hill.com.
To
Mum, Dad, Grandma, and Evelyn
Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do
Contents

   Acknowledgments vii
   Introduction    ix
1 Fast Passes / Slow Merges 1
  The Discontent of Being Averaged
2 Bagged Spinach / Bad Score 25
  The Virtue of Being Wrong
3 Item Bank / Risk Pool 63
  The Dilemma of Being Together
4 Timid Testers / Magic Lassos       95
  The Sway of Being Asymmetric
5 Jet Crashes / Jackpots 137
  The Power of Being Impossible
   Conclusion     155
   Notes   183
   Index 205




                                          v
Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do
Acknowledgments


I  would like to acknowledge the guidance and assistance of Grace
   Freedson, Michele Paige, Micah Burch, Kate Johnson, Steven
Tuntono, Beth McFadden, Talbot Katz, and my editors, John
Aherne and Joseph Berkowitz. My two sisters and brother made
invaluable contributions as my most plain-spoken critics.
   In addition, throughout this project, I was inspired by fans of
my Junk Charts blog, www.junkcharts.typepad.com.




                                                               vii
Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do
Introduction


T      his is not another book about “damned lies and statistics.”
       That evergreen topic has inspired masterworks from Darrell
Huff, John Allen Paulos, Ed Tufte, and Howard Wainer, among
others. From the manipulative politician to the blundering ana-
lyst, from the amateur economist to the hard-selling advertiser,
we have endless examples of what can go wrong when numbers
are misused. Cherry-picking, oversimplifying, obfuscating—we
have seen them all. This book takes a different direction, a positive
position: I am interested in what happens when things go right,
which is to say, what happens when numbers don’t lie.



The More We Know We Don’t Know
What will we learn from Bernie Madoff, the New York–based
fund manager–swindler who impoverished an exclusive club of
well-to-do patrons over three decades until he confessed in 2008?
Or from the Enron executives whose make-believe accounting
wiped out the retirement savings of thousands of employees? Per-
haps we ought to know why the reams of fi nancial data, printed
statements, and official fi lings yielded few clues to the investors,
auditors, and regulators who fell for the deception.

                                                                  ix
x   INTRODUCTION


   What will we learn from the Vioxx debacle in which the Food
and Drug Administration conceded, five years after blessing its
initial release, that the drug had caused ten thousand heart attacks?
Perhaps we ought to know why widely available health and medi-
cal information and greater scale and sophistication of clinical tri-
als did not spare Vioxx inventor Merck, doctors, or patients from
overlooking the deadly side effects.
   We ought also to ask why, despite having access to torrents of
stock data and company reports, most of us have not made a killing
in the stock market. Despite tallying up the nutritional informa-
tion of every can and every packet of food, most of us have not
achieved the hoped-for bodily downsizing. Despite heavy invest-
ment in information technology, fl ight delays and traffic jams
continue to get worse. Despite detailed records of our shopping
behavior, many companies have but the slightest clue when we
call their service centers. Despite failing to arrest cancer in patients
during large-scale clinical trials, beta-carotene and vitamin pills
keep flying off the pharmacy shelves.
   These examples reveal the unpleasant surprise that the mod-
ern obsession with measurement has made us none the wiser. We
collect, store, process, and analyze more information than ever
before—but to what end? Aristotle’s wisdom has never been more
relevant than it is today: the more we know, the more we know we
don’t know.



Stories of a Positive Nature
We begin to overcome these failures by examining positive exam-
ples of how enterprising people are making sensible use of the new
information to better our world. In the next five chapters, you will
meet engineers who keep the traffic flowing on Minnesota high-
INTRODUCTION    xi


ways, disease detectives who warn us about unsafe foods, actuaries
who calculate how much Floridians must pay to insure homes
against hurricanes, educators who strive to make standardized tests
like the SAT fair, lab technicians who scrutinize blood samples
from elite athletes, data miners who think they can detect our lies,
lottery operators who face evidence of fraud, Walt Disney scien-
tists who devise ever-clever ways to shorten queues, mathemati-
cians whose ideas have set off the explosion of consumer credit,
and researchers who offer the best tips for air travel.
    These ten portraits feature some special men and women whose
work is rarely celebrated openly. The reason for this neglect is that
their achievement is not of invention, for which we shower awards
and accolades, but of adaptation, of refinement, of salesmanship,
and of perseverance. Their expertise is applied science.



The Statistical Way of Thinking
For me, these ten stories ultimately merge into one: all of these
exemplary scientists rely on the statistical way of thinking, as dis-
tinct from everyday thinking. I organize the stories into five pairs,
each dealing with an essential statistical principle.
   What is so unconventional about the statistical way of
thinking?
   First, statisticians do not care much for the popular concept
of the statistical average; instead, they fi xate on any deviation
from the average. They worry about how large these variations
are, how frequently they occur, and why they exist. In Chapter 1,
the experts studying waiting lines explain why we should worry
more about the variability of waiting time than about its average.
Highway engineers in Minnesota tell us why their favorite tactic
to reduce congestion is a technology that forces commuters to wait
xii   INTRODUCTION


more, while Disney engineers make the case that the most effec-
tive tool to reduce wait times does not actually reduce average
wait times.
   Second, variability does not need to be explained by reason-
able causes, despite our natural desire for a rational explanation of
everything; statisticians are frequently just as happy to pore over
patterns of correlation. In Chapter 2, we compare and contrast
these two modes of statistical modeling by trailing disease detec-
tives on the hunt for tainted spinach (causal models) and by prying
open the black box that produces credit scores (correlational mod-
els). Surprisingly, these practitioners freely admit that their models
are “wrong” in the sense that they do not perfectly describe the
world around us; we explore how they justify what they do.
   Third, statisticians are constantly looking out for missed
nuances: a statistical average for all groups may well hide vital
differences that exist between these groups. Ignoring group differ-
ences when they are present frequently portends inequitable treat-
ment. The typical way of defi ning groups, such as by race, gender,
or income, is often found wanting. In Chapter 3, we evaluate
the mixed consequences that occur when the insurance industry
adjusts prices to reflect the difference in the amount of exposure to
hurricanes between coastal and inland properties, as well as what
happens when designers of standardized tests attempt to eliminate
the gap in performance between black and white students.
   Fourth, decisions based on statistics can be calibrated to strike a
balance between two types of errors. Predictably, decision makers
have an incentive to focus exclusively on minimizing any mistake
that could bring about public humiliation, but statisticians point
out that because of this bias, their decisions will aggravate other
errors, which are unnoticed but serious. We use this framework
in Chapter 4 to explain why automated data-mining technologies
cannot identify terrorist plots without infl icting unacceptable col-
INTRODUCTION     xiii


lateral damage, and why the steroid-testing laboratories are inef-
fective at catching most of the cheating athletes.
   Finally, statisticians follow a specific protocol known as statis-
tical testing when deciding whether the evidence fits the crime,
so to speak. Unlike some of us, they don’t believe in miracles. In
other words, if the most unusual coincidence must be contrived to
explain the inexplicable, they prefer leaving the crime unsolved.
In Chapter 5, we see how this powerful tool was used to uncover
extensive fraud in a Canadian state lottery and to dispel myths
behind the fear of flying.
   These f ive principles are central to statistical thinking.
After reading this book, you too can use them to make better
decisions.



The Applied Scientist at Work
These stories take a shape that reflects my own experience as a
practitioner of business statistics. They bring out aspects of the
applied scientist’s work that differ substantively from that of the
pure or theoretical scientist.
   All the examples involve decisions that affect our lives in one
way or another, whether through public policies, business strat-
egies, or personal choices. Whereas the pure scientist is chiefly
concerned with “what’s new,” applied work must deal with “how
high,” as in “how high would profits go?” or “how high would
the polls go?” In addition to purely technical yardsticks, applied
scientists have goals that are societal, as with the Minnesota high-
way engineers; or psychological, as with the Disney queue manag-
ers; or financial, as with hurricane insurers and loan officers.
   The pursuit of pure science is rarely limited by time; as an
extreme example, mathematician Andrew Wiles meticulously
xiv   INTRODUCTION


constructed his proof of Fermat’s last theorem over seven years.
Such luxury is not afforded the applied scientist, who must deliver
a best effort within a fi nite time limit, typically in the order of
weeks or months. External factors, even the life cycle of green
produce or the pipeline of drug innovations, may dictate the con-
straint on time. What use would it be to discover the cause of an
E. coli outbreak the day after the outbreak dies down? What is the
point of developing a test for a designer steroid after dozens of ath-
letes have already gained unfair advantage from using it?
   Some of the most elegant achievements in pure science result
from judiciously choosing a set of simplifying assumptions; the
applied scientist adapts these results to the real world by noticing
and then coping with inconvenient details. If you have read the
writings of Nassim Taleb, you will recognize the bell curve as one
such simplification that demands refinement in certain situations.
Another example, considered in Chapter 3, is lumping together
distinct groups of people when they should be treated differently.
   Successful applied scientists develop a feel for the decision-
making process: they know the key influencers, they grasp their
individual ways of thinking, they comprehend their motivations,
and they anticipate sources of confl ict. Crucially, they repackage
their logic-laced messages to impress their ideas upon those who
are more comfortable with intuition or emotion than with evi-
dence. Because understanding the context is so valuable to the
applied scientist’s work, I have included a wealth of details in all of
the stories.
   To sum up, applied science has measures of success distinct from
those used in theoretical science. For instance, Google recognized
this distinction by rolling out its famous “20 percent” time policy,
which allows its engineers to split their week between pure science
projects of their choosing and applied projects (with an 80 percent
emphasis on the latter!).
INTRODUCTION     xv


More
And there is something extra for those who want more. The Con-
clusion of this book serves a dual purpose of consolidation and
extension. While summarizing the statistical way of thinking, I
introduce the relevant technical language in case you should want
to cross-reference a more conventional book. To illustrate how
universal these statistical principles are, I revisit each concept in
a new light, harnessing a different story from the one originally
selected. Finally, the Notes section contains further remarks as
well as my main sources. A complete bibliography is available at
the book’s link on my website, www.junkcharts.typepad.com.
   Numbers already rule your world. And you must not be in the
dark about this fact. See how some applied scientists use statistical
thinking to make our lives better. You will be amazed how you
can use numbers to make everyday decisions in your own life.

More Related Content

What's hot

Horizon Scan: ICT and the Future of Retail
Horizon Scan: ICT and the Future of RetailHorizon Scan: ICT and the Future of Retail
Horizon Scan: ICT and the Future of RetailEricsson
 
2015 Fintech Distrubtion Survey
2015 Fintech Distrubtion Survey2015 Fintech Distrubtion Survey
2015 Fintech Distrubtion SurveyBank Director
 
The 100 Leading Global Fintech Innovators 2015
The 100 Leading Global Fintech Innovators 2015 The 100 Leading Global Fintech Innovators 2015
The 100 Leading Global Fintech Innovators 2015 H2 Ventures
 
Simpler, Clearer, Faster Government Services
Simpler, Clearer, Faster Government ServicesSimpler, Clearer, Faster Government Services
Simpler, Clearer, Faster Government ServicesThoughtworks
 
How to Catch Frogs - The Impact of Disruptive Technology to African Travellers
How to Catch Frogs - The Impact of Disruptive Technology to African TravellersHow to Catch Frogs - The Impact of Disruptive Technology to African Travellers
How to Catch Frogs - The Impact of Disruptive Technology to African TravellersStephenie Rodriguez
 
E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...
E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...
E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...AdCMO
 
Raconteur Future of Procurement 2019
Raconteur Future of Procurement 2019Raconteur Future of Procurement 2019
Raconteur Future of Procurement 2019Javier Caravantes
 
Leading In The New | Harness The Power Of Disruption
Leading In The New | Harness The Power Of DisruptionLeading In The New | Harness The Power Of Disruption
Leading In The New | Harness The Power Of DisruptionAccenture Insurance
 
We’re leaking, and everything’s fine: How and why companies deliberately leak...
We’re leaking, and everything’s fine: How and why companies deliberately leak...We’re leaking, and everything’s fine: How and why companies deliberately leak...
We’re leaking, and everything’s fine: How and why companies deliberately leak...Ian McCarthy
 
A New French Revolution? Building a National Economy for the #Digital Age
A New French Revolution? Building a National Economy for the #Digital AgeA New French Revolution? Building a National Economy for the #Digital Age
A New French Revolution? Building a National Economy for the #Digital AgeCapgemini
 
2014 Global Programmatic Insights Report: From Scale to Sophistication
2014 Global Programmatic Insights Report: From Scale to Sophistication2014 Global Programmatic Insights Report: From Scale to Sophistication
2014 Global Programmatic Insights Report: From Scale to SophisticationJaldous888
 
Get Retail Smart - High velocity retail
Get Retail Smart - High velocity retailGet Retail Smart - High velocity retail
Get Retail Smart - High velocity retailemmersons1
 
New Marketing Summit: Dancing Shoes for Honeybees - Don Peppers
New Marketing Summit: Dancing Shoes for Honeybees - Don PeppersNew Marketing Summit: Dancing Shoes for Honeybees - Don Peppers
New Marketing Summit: Dancing Shoes for Honeybees - Don PeppersNewMarketingSummit2008
 
Atomico Need-to-Know 13 April 2018
Atomico Need-to-Know 13 April 2018Atomico Need-to-Know 13 April 2018
Atomico Need-to-Know 13 April 2018Atomico
 
The State of Enterprise Software
The State of Enterprise SoftwareThe State of Enterprise Software
The State of Enterprise SoftwareGreylock Partners
 
Mobile Marketing & Beyond
Mobile Marketing & BeyondMobile Marketing & Beyond
Mobile Marketing & Beyondjbatistich
 

What's hot (19)

Horizon Scan: ICT and the Future of Retail
Horizon Scan: ICT and the Future of RetailHorizon Scan: ICT and the Future of Retail
Horizon Scan: ICT and the Future of Retail
 
2015 Fintech Distrubtion Survey
2015 Fintech Distrubtion Survey2015 Fintech Distrubtion Survey
2015 Fintech Distrubtion Survey
 
The 100 Leading Global Fintech Innovators 2015
The 100 Leading Global Fintech Innovators 2015 The 100 Leading Global Fintech Innovators 2015
The 100 Leading Global Fintech Innovators 2015
 
The economics of digital identity
The economics of digital identityThe economics of digital identity
The economics of digital identity
 
Simpler, Clearer, Faster Government Services
Simpler, Clearer, Faster Government ServicesSimpler, Clearer, Faster Government Services
Simpler, Clearer, Faster Government Services
 
How to Catch Frogs - The Impact of Disruptive Technology to African Travellers
How to Catch Frogs - The Impact of Disruptive Technology to African TravellersHow to Catch Frogs - The Impact of Disruptive Technology to African Travellers
How to Catch Frogs - The Impact of Disruptive Technology to African Travellers
 
E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...
E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...
E marketer small_businesses_as_tough_b2b_customers-shaky_in_their_own_marketi...
 
Raconteur Future of Procurement 2019
Raconteur Future of Procurement 2019Raconteur Future of Procurement 2019
Raconteur Future of Procurement 2019
 
Leading In The New | Harness The Power Of Disruption
Leading In The New | Harness The Power Of DisruptionLeading In The New | Harness The Power Of Disruption
Leading In The New | Harness The Power Of Disruption
 
We’re leaking, and everything’s fine: How and why companies deliberately leak...
We’re leaking, and everything’s fine: How and why companies deliberately leak...We’re leaking, and everything’s fine: How and why companies deliberately leak...
We’re leaking, and everything’s fine: How and why companies deliberately leak...
 
A New French Revolution? Building a National Economy for the #Digital Age
A New French Revolution? Building a National Economy for the #Digital AgeA New French Revolution? Building a National Economy for the #Digital Age
A New French Revolution? Building a National Economy for the #Digital Age
 
2014 Global Programmatic Insights Report: From Scale to Sophistication
2014 Global Programmatic Insights Report: From Scale to Sophistication2014 Global Programmatic Insights Report: From Scale to Sophistication
2014 Global Programmatic Insights Report: From Scale to Sophistication
 
AsiaNext - Volume 4 - Indonesia
AsiaNext - Volume 4 - IndonesiaAsiaNext - Volume 4 - Indonesia
AsiaNext - Volume 4 - Indonesia
 
Get Retail Smart - High velocity retail
Get Retail Smart - High velocity retailGet Retail Smart - High velocity retail
Get Retail Smart - High velocity retail
 
[REPORT PREVIEW] GDPR Beyond May 25, 2018
[REPORT PREVIEW] GDPR Beyond May 25, 2018[REPORT PREVIEW] GDPR Beyond May 25, 2018
[REPORT PREVIEW] GDPR Beyond May 25, 2018
 
New Marketing Summit: Dancing Shoes for Honeybees - Don Peppers
New Marketing Summit: Dancing Shoes for Honeybees - Don PeppersNew Marketing Summit: Dancing Shoes for Honeybees - Don Peppers
New Marketing Summit: Dancing Shoes for Honeybees - Don Peppers
 
Atomico Need-to-Know 13 April 2018
Atomico Need-to-Know 13 April 2018Atomico Need-to-Know 13 April 2018
Atomico Need-to-Know 13 April 2018
 
The State of Enterprise Software
The State of Enterprise SoftwareThe State of Enterprise Software
The State of Enterprise Software
 
Mobile Marketing & Beyond
Mobile Marketing & BeyondMobile Marketing & Beyond
Mobile Marketing & Beyond
 

Viewers also liked

Aronson 6e ch5_self
Aronson 6e ch5_selfAronson 6e ch5_self
Aronson 6e ch5_selfmrkramek
 
A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...
A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...
A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...Paulino Silva
 
The social animal
The social animalThe social animal
The social animaljcklp1
 
The Art of War Summary
The Art of War SummaryThe Art of War Summary
The Art of War SummaryArun T P
 
The big book of key performance indicators by eric peterson
The big book of key performance indicators by eric petersonThe big book of key performance indicators by eric peterson
The big book of key performance indicators by eric petersonNeo Consulting
 
25 KPIs Every Manager Needs To Know
25 KPIs Every Manager Needs To Know25 KPIs Every Manager Needs To Know
25 KPIs Every Manager Needs To KnowBernard Marr
 

Viewers also liked (6)

Aronson 6e ch5_self
Aronson 6e ch5_selfAronson 6e ch5_self
Aronson 6e ch5_self
 
A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...
A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...
A Selection of Key Performance Indicators from the 4 Perspectives of Balanced...
 
The social animal
The social animalThe social animal
The social animal
 
The Art of War Summary
The Art of War SummaryThe Art of War Summary
The Art of War Summary
 
The big book of key performance indicators by eric peterson
The big book of key performance indicators by eric petersonThe big book of key performance indicators by eric peterson
The big book of key performance indicators by eric peterson
 
25 KPIs Every Manager Needs To Know
25 KPIs Every Manager Needs To Know25 KPIs Every Manager Needs To Know
25 KPIs Every Manager Needs To Know
 

Similar to Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do

Writing Letter On Parchment Paper
Writing Letter On Parchment PaperWriting Letter On Parchment Paper
Writing Letter On Parchment PaperShannon Sand
 
Pirate Writing By Monica Dunbar - I Heart Grade 3
Pirate Writing By Monica Dunbar - I Heart Grade 3Pirate Writing By Monica Dunbar - I Heart Grade 3
Pirate Writing By Monica Dunbar - I Heart Grade 3April Charlton
 
Personality Type Essay. Personality Types Essay Example Topics and Well Writ...
Personality Type Essay. Personality Types Essay Example  Topics and Well Writ...Personality Type Essay. Personality Types Essay Example  Topics and Well Writ...
Personality Type Essay. Personality Types Essay Example Topics and Well Writ...Nikki Barreto
 
Apply Texas Essay Topic A Example. How To Write Per
Apply Texas Essay Topic A Example. How To Write PerApply Texas Essay Topic A Example. How To Write Per
Apply Texas Essay Topic A Example. How To Write PerJenny Smith
 
Clinical Trial And Joint Venture
Clinical Trial And Joint VentureClinical Trial And Joint Venture
Clinical Trial And Joint VentureGloria Moore
 
What Does A Term Paper Look Like. Term Paper Form
What Does A Term Paper Look Like. Term Paper FormWhat Does A Term Paper Look Like. Term Paper Form
What Does A Term Paper Look Like. Term Paper FormKristen Stacey
 
Decision Making Reflection Essay
Decision Making Reflection EssayDecision Making Reflection Essay
Decision Making Reflection EssayAlicia Stoddard
 
Reflective Essay On Skills Development. Online assignment writing service.
Reflective Essay On Skills Development. Online assignment writing service.Reflective Essay On Skills Development. Online assignment writing service.
Reflective Essay On Skills Development. Online assignment writing service.Tiny Keenan
 
Free Images Writing, Texture, Li
Free Images Writing, Texture, LiFree Images Writing, Texture, Li
Free Images Writing, Texture, LiRobyn Champagne
 
Brief History Of Databases Essay. Online assignment writing service.
Brief History Of Databases Essay. Online assignment writing service.Brief History Of Databases Essay. Online assignment writing service.
Brief History Of Databases Essay. Online assignment writing service.Lori Flores
 
Affluenza In American Society
Affluenza In American SocietyAffluenza In American Society
Affluenza In American SocietyJulie Champagne
 
assignment of statistics 2.pdf
assignment of statistics 2.pdfassignment of statistics 2.pdf
assignment of statistics 2.pdfSyedDaniyalKazmi2
 
How To Write An Analysis Essay 101 Step-By-Step Guide Blog
How To Write An Analysis Essay 101 Step-By-Step Guide BlogHow To Write An Analysis Essay 101 Step-By-Step Guide Blog
How To Write An Analysis Essay 101 Step-By-Step Guide BlogKris Cundiff
 
Consumer Behaviour Short Report
Consumer Behaviour Short ReportConsumer Behaviour Short Report
Consumer Behaviour Short ReportDeb Birch
 
If I Were The President Essay.pdf
If I Were The President Essay.pdfIf I Were The President Essay.pdf
If I Were The President Essay.pdfErin Sanders
 
Inferential Statistics In Business
Inferential Statistics In BusinessInferential Statistics In Business
Inferential Statistics In BusinessAngie Willis
 
Ancient India Writing Paper 273, 15 August India Independence Day Acti
Ancient India Writing Paper 273, 15 August India Independence Day ActiAncient India Writing Paper 273, 15 August India Independence Day Acti
Ancient India Writing Paper 273, 15 August India Independence Day ActiGerri Dominguez
 
Tips How To Write A Paper Presentation. Online assignment writing service.
Tips How To Write A Paper Presentation. Online assignment writing service.Tips How To Write A Paper Presentation. Online assignment writing service.
Tips How To Write A Paper Presentation. Online assignment writing service.Denise Miller
 
Personal Change Essay
Personal Change EssayPersonal Change Essay
Personal Change EssayLauren Smith
 

Similar to Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do (20)

Writing Letter On Parchment Paper
Writing Letter On Parchment PaperWriting Letter On Parchment Paper
Writing Letter On Parchment Paper
 
Pirate Writing By Monica Dunbar - I Heart Grade 3
Pirate Writing By Monica Dunbar - I Heart Grade 3Pirate Writing By Monica Dunbar - I Heart Grade 3
Pirate Writing By Monica Dunbar - I Heart Grade 3
 
Personality Type Essay. Personality Types Essay Example Topics and Well Writ...
Personality Type Essay. Personality Types Essay Example  Topics and Well Writ...Personality Type Essay. Personality Types Essay Example  Topics and Well Writ...
Personality Type Essay. Personality Types Essay Example Topics and Well Writ...
 
Apply Texas Essay Topic A Example. How To Write Per
Apply Texas Essay Topic A Example. How To Write PerApply Texas Essay Topic A Example. How To Write Per
Apply Texas Essay Topic A Example. How To Write Per
 
Clinical Trial And Joint Venture
Clinical Trial And Joint VentureClinical Trial And Joint Venture
Clinical Trial And Joint Venture
 
What Does A Term Paper Look Like. Term Paper Form
What Does A Term Paper Look Like. Term Paper FormWhat Does A Term Paper Look Like. Term Paper Form
What Does A Term Paper Look Like. Term Paper Form
 
Decision Making Reflection Essay
Decision Making Reflection EssayDecision Making Reflection Essay
Decision Making Reflection Essay
 
Unfolding Algorithms
Unfolding AlgorithmsUnfolding Algorithms
Unfolding Algorithms
 
Reflective Essay On Skills Development. Online assignment writing service.
Reflective Essay On Skills Development. Online assignment writing service.Reflective Essay On Skills Development. Online assignment writing service.
Reflective Essay On Skills Development. Online assignment writing service.
 
Free Images Writing, Texture, Li
Free Images Writing, Texture, LiFree Images Writing, Texture, Li
Free Images Writing, Texture, Li
 
Brief History Of Databases Essay. Online assignment writing service.
Brief History Of Databases Essay. Online assignment writing service.Brief History Of Databases Essay. Online assignment writing service.
Brief History Of Databases Essay. Online assignment writing service.
 
Affluenza In American Society
Affluenza In American SocietyAffluenza In American Society
Affluenza In American Society
 
assignment of statistics 2.pdf
assignment of statistics 2.pdfassignment of statistics 2.pdf
assignment of statistics 2.pdf
 
How To Write An Analysis Essay 101 Step-By-Step Guide Blog
How To Write An Analysis Essay 101 Step-By-Step Guide BlogHow To Write An Analysis Essay 101 Step-By-Step Guide Blog
How To Write An Analysis Essay 101 Step-By-Step Guide Blog
 
Consumer Behaviour Short Report
Consumer Behaviour Short ReportConsumer Behaviour Short Report
Consumer Behaviour Short Report
 
If I Were The President Essay.pdf
If I Were The President Essay.pdfIf I Were The President Essay.pdf
If I Were The President Essay.pdf
 
Inferential Statistics In Business
Inferential Statistics In BusinessInferential Statistics In Business
Inferential Statistics In Business
 
Ancient India Writing Paper 273, 15 August India Independence Day Acti
Ancient India Writing Paper 273, 15 August India Independence Day ActiAncient India Writing Paper 273, 15 August India Independence Day Acti
Ancient India Writing Paper 273, 15 August India Independence Day Acti
 
Tips How To Write A Paper Presentation. Online assignment writing service.
Tips How To Write A Paper Presentation. Online assignment writing service.Tips How To Write A Paper Presentation. Online assignment writing service.
Tips How To Write A Paper Presentation. Online assignment writing service.
 
Personal Change Essay
Personal Change EssayPersonal Change Essay
Personal Change Essay
 

More from McGraw-Hill Professional

Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...
Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...
Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...McGraw-Hill Professional
 
Leading with Data: Boost Your ROI with Open and Big Data
Leading with Data: Boost Your ROI with Open and Big DataLeading with Data: Boost Your ROI with Open and Big Data
Leading with Data: Boost Your ROI with Open and Big DataMcGraw-Hill Professional
 
Leverage Content Marketing and Social Media to Engage More Customers
Leverage Content Marketing and Social Media to Engage More CustomersLeverage Content Marketing and Social Media to Engage More Customers
Leverage Content Marketing and Social Media to Engage More CustomersMcGraw-Hill Professional
 
Remarkable Leadership to Inspire Great Work
Remarkable Leadership to Inspire Great WorkRemarkable Leadership to Inspire Great Work
Remarkable Leadership to Inspire Great WorkMcGraw-Hill Professional
 
Coaching Ability for Fantasy Football from Numbersense by Kaiser Fung
Coaching Ability for Fantasy Football from Numbersense by Kaiser FungCoaching Ability for Fantasy Football from Numbersense by Kaiser Fung
Coaching Ability for Fantasy Football from Numbersense by Kaiser FungMcGraw-Hill Professional
 
Building Long-Term Value in a Short-Term World
Building Long-Term Value in a Short-Term WorldBuilding Long-Term Value in a Short-Term World
Building Long-Term Value in a Short-Term WorldMcGraw-Hill Professional
 
What Would Drucker Do Now? by Rick Wartzman
What Would Drucker Do Now? by Rick WartzmanWhat Would Drucker Do Now? by Rick Wartzman
What Would Drucker Do Now? by Rick WartzmanMcGraw-Hill Professional
 
The Present and Future of High Frequency Trading
The Present and Future of High Frequency TradingThe Present and Future of High Frequency Trading
The Present and Future of High Frequency TradingMcGraw-Hill Professional
 
The Human Dimension and Management as a Liberal Art
The Human Dimension and Management as a Liberal ArtThe Human Dimension and Management as a Liberal Art
The Human Dimension and Management as a Liberal ArtMcGraw-Hill Professional
 
Applied Social Ecology Innovation & Change
Applied Social Ecology Innovation & ChangeApplied Social Ecology Innovation & Change
Applied Social Ecology Innovation & ChangeMcGraw-Hill Professional
 
Social Ecology and the Practice of Management
Social Ecology and the Practice of ManagementSocial Ecology and the Practice of Management
Social Ecology and the Practice of ManagementMcGraw-Hill Professional
 
Federalism and the Distribution of Power and Authority
Federalism and the Distribution of Power and AuthorityFederalism and the Distribution of Power and Authority
Federalism and the Distribution of Power and AuthorityMcGraw-Hill Professional
 
Contributions of Management as a Liberal Art Practice
Contributions of Management as a Liberal Art PracticeContributions of Management as a Liberal Art Practice
Contributions of Management as a Liberal Art PracticeMcGraw-Hill Professional
 
Management and Liberal Arts Traditions Bridging the Two Worlds
Management and Liberal Arts Traditions Bridging the Two WorldsManagement and Liberal Arts Traditions Bridging the Two Worlds
Management and Liberal Arts Traditions Bridging the Two WorldsMcGraw-Hill Professional
 
Management's Origins as a Study Within the Liberal
Management's Origins as a Study Within the LiberalManagement's Origins as a Study Within the Liberal
Management's Origins as a Study Within the LiberalMcGraw-Hill Professional
 

More from McGraw-Hill Professional (20)

Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...
Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...
Learn How to Gain Insights and Perspective from Think to Win co-author Peter ...
 
Leading with Data: Boost Your ROI with Open and Big Data
Leading with Data: Boost Your ROI with Open and Big DataLeading with Data: Boost Your ROI with Open and Big Data
Leading with Data: Boost Your ROI with Open and Big Data
 
Leverage Content Marketing and Social Media to Engage More Customers
Leverage Content Marketing and Social Media to Engage More CustomersLeverage Content Marketing and Social Media to Engage More Customers
Leverage Content Marketing and Social Media to Engage More Customers
 
Remarkable Leadership to Inspire Great Work
Remarkable Leadership to Inspire Great WorkRemarkable Leadership to Inspire Great Work
Remarkable Leadership to Inspire Great Work
 
Coaching Ability for Fantasy Football from Numbersense by Kaiser Fung
Coaching Ability for Fantasy Football from Numbersense by Kaiser FungCoaching Ability for Fantasy Football from Numbersense by Kaiser Fung
Coaching Ability for Fantasy Football from Numbersense by Kaiser Fung
 
The Tasti D-Lite Way
The Tasti D-Lite WayThe Tasti D-Lite Way
The Tasti D-Lite Way
 
Building Long-Term Value in a Short-Term World
Building Long-Term Value in a Short-Term WorldBuilding Long-Term Value in a Short-Term World
Building Long-Term Value in a Short-Term World
 
What Would Drucker Do Now? by Rick Wartzman
What Would Drucker Do Now? by Rick WartzmanWhat Would Drucker Do Now? by Rick Wartzman
What Would Drucker Do Now? by Rick Wartzman
 
Saving Capitalism from Short-Termism
Saving Capitalism from Short-TermismSaving Capitalism from Short-Termism
Saving Capitalism from Short-Termism
 
The Present and Future of High Frequency Trading
The Present and Future of High Frequency TradingThe Present and Future of High Frequency Trading
The Present and Future of High Frequency Trading
 
The Human Dimension and Management as a Liberal Art
The Human Dimension and Management as a Liberal ArtThe Human Dimension and Management as a Liberal Art
The Human Dimension and Management as a Liberal Art
 
Applied Social Ecology Innovation & Change
Applied Social Ecology Innovation & ChangeApplied Social Ecology Innovation & Change
Applied Social Ecology Innovation & Change
 
Social Ecology and the Practice of Management
Social Ecology and the Practice of ManagementSocial Ecology and the Practice of Management
Social Ecology and the Practice of Management
 
Effective Leadership as a Liberal Art
Effective Leadership as a Liberal ArtEffective Leadership as a Liberal Art
Effective Leadership as a Liberal Art
 
Federalism and the Distribution of Power and Authority
Federalism and the Distribution of Power and AuthorityFederalism and the Distribution of Power and Authority
Federalism and the Distribution of Power and Authority
 
Contributions of Management as a Liberal Art Practice
Contributions of Management as a Liberal Art PracticeContributions of Management as a Liberal Art Practice
Contributions of Management as a Liberal Art Practice
 
Management and Liberal Arts Traditions Bridging the Two Worlds
Management and Liberal Arts Traditions Bridging the Two WorldsManagement and Liberal Arts Traditions Bridging the Two Worlds
Management and Liberal Arts Traditions Bridging the Two Worlds
 
Management's Origins as a Study Within the Liberal
Management's Origins as a Study Within the LiberalManagement's Origins as a Study Within the Liberal
Management's Origins as a Study Within the Liberal
 
Capturing New Markets by Stephen Wunker
Capturing New Markets by Stephen WunkerCapturing New Markets by Stephen Wunker
Capturing New Markets by Stephen Wunker
 
The Optimization Edge by Steve Sashihara
The Optimization Edge by Steve SashiharaThe Optimization Edge by Steve Sashihara
The Optimization Edge by Steve Sashihara
 

Recently uploaded

Awards Presentation 2024 - March 12 2024
Awards Presentation 2024 - March 12 2024Awards Presentation 2024 - March 12 2024
Awards Presentation 2024 - March 12 2024bsellato
 
Quantitative research methodology and survey design
Quantitative research methodology and survey designQuantitative research methodology and survey design
Quantitative research methodology and survey designBalelaBoru
 
BBA 205 BE UNIT 2 economic systems prof dr kanchan.pptx
BBA 205 BE UNIT 2 economic systems prof dr kanchan.pptxBBA 205 BE UNIT 2 economic systems prof dr kanchan.pptx
BBA 205 BE UNIT 2 economic systems prof dr kanchan.pptxProf. Kanchan Kumari
 
DLL Catch Up Friday March 22.docx CATCH UP FRIDAYS
DLL Catch Up Friday March 22.docx CATCH UP FRIDAYSDLL Catch Up Friday March 22.docx CATCH UP FRIDAYS
DLL Catch Up Friday March 22.docx CATCH UP FRIDAYSTeacherNicaPrintable
 
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...Nguyen Thanh Tu Collection
 
Riti theory by Vamana Indian poetics.pptx
Riti theory by Vamana Indian poetics.pptxRiti theory by Vamana Indian poetics.pptx
Riti theory by Vamana Indian poetics.pptxDhatriParmar
 
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...AKSHAYMAGAR17
 
AI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace ApplicationsAI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace ApplicationsStella Lee
 
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptxBBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptxProf. Kanchan Kumari
 
Material Remains as Source of Ancient Indian History & Culture.ppt
Material Remains as Source of Ancient Indian History & Culture.pptMaterial Remains as Source of Ancient Indian History & Culture.ppt
Material Remains as Source of Ancient Indian History & Culture.pptBanaras Hindu University
 
Metabolism , Metabolic Fate& disorders of cholesterol.pptx
Metabolism , Metabolic Fate& disorders of cholesterol.pptxMetabolism , Metabolic Fate& disorders of cholesterol.pptx
Metabolism , Metabolic Fate& disorders of cholesterol.pptxDr. Santhosh Kumar. N
 
ICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdfICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdfVanessa Camilleri
 
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in PharmacyASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in PharmacySumit Tiwari
 
Plant Tissue culture., Plasticity, Totipotency, pptx
Plant Tissue culture., Plasticity, Totipotency, pptxPlant Tissue culture., Plasticity, Totipotency, pptx
Plant Tissue culture., Plasticity, Totipotency, pptxHimansu10
 
3.12.24 Freedom Summer in Mississippi.pptx
3.12.24 Freedom Summer in Mississippi.pptx3.12.24 Freedom Summer in Mississippi.pptx
3.12.24 Freedom Summer in Mississippi.pptxmary850239
 
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...Nguyen Thanh Tu Collection
 
POST ENCEPHALITIS case study Jitendra bhargav
POST ENCEPHALITIS case study  Jitendra bhargavPOST ENCEPHALITIS case study  Jitendra bhargav
POST ENCEPHALITIS case study Jitendra bhargavJitendra Bhargav
 
Pharmacology chapter No 7 full notes.pdf
Pharmacology chapter No 7 full notes.pdfPharmacology chapter No 7 full notes.pdf
Pharmacology chapter No 7 full notes.pdfSumit Tiwari
 

Recently uploaded (20)

Awards Presentation 2024 - March 12 2024
Awards Presentation 2024 - March 12 2024Awards Presentation 2024 - March 12 2024
Awards Presentation 2024 - March 12 2024
 
Quantitative research methodology and survey design
Quantitative research methodology and survey designQuantitative research methodology and survey design
Quantitative research methodology and survey design
 
BBA 205 BE UNIT 2 economic systems prof dr kanchan.pptx
BBA 205 BE UNIT 2 economic systems prof dr kanchan.pptxBBA 205 BE UNIT 2 economic systems prof dr kanchan.pptx
BBA 205 BE UNIT 2 economic systems prof dr kanchan.pptx
 
DLL Catch Up Friday March 22.docx CATCH UP FRIDAYS
DLL Catch Up Friday March 22.docx CATCH UP FRIDAYSDLL Catch Up Friday March 22.docx CATCH UP FRIDAYS
DLL Catch Up Friday March 22.docx CATCH UP FRIDAYS
 
ANOVA Parametric test: Biostatics and Research Methodology
ANOVA Parametric test: Biostatics and Research MethodologyANOVA Parametric test: Biostatics and Research Methodology
ANOVA Parametric test: Biostatics and Research Methodology
 
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...
BÀI TẬP BỔ TRỢ TIẾNG ANH 11 THEO ĐƠN VỊ BÀI HỌC - CẢ NĂM - CÓ FILE NGHE (FRIE...
 
Riti theory by Vamana Indian poetics.pptx
Riti theory by Vamana Indian poetics.pptxRiti theory by Vamana Indian poetics.pptx
Riti theory by Vamana Indian poetics.pptx
 
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
DNA and RNA , Structure, Functions, Types, difference, Similarities, Protein ...
 
AI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace ApplicationsAI Uses and Misuses: Academic and Workplace Applications
AI Uses and Misuses: Academic and Workplace Applications
 
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptxBBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
BBA 205 BUSINESS ENVIRONMENT UNIT I.pptx
 
Material Remains as Source of Ancient Indian History & Culture.ppt
Material Remains as Source of Ancient Indian History & Culture.pptMaterial Remains as Source of Ancient Indian History & Culture.ppt
Material Remains as Source of Ancient Indian History & Culture.ppt
 
t-test Parametric test Biostatics and Research Methodology
t-test Parametric test Biostatics and Research Methodologyt-test Parametric test Biostatics and Research Methodology
t-test Parametric test Biostatics and Research Methodology
 
Metabolism , Metabolic Fate& disorders of cholesterol.pptx
Metabolism , Metabolic Fate& disorders of cholesterol.pptxMetabolism , Metabolic Fate& disorders of cholesterol.pptx
Metabolism , Metabolic Fate& disorders of cholesterol.pptx
 
ICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdfICS2208 Lecture4 Intelligent Interface Agents.pdf
ICS2208 Lecture4 Intelligent Interface Agents.pdf
 
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in PharmacyASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
ASTRINGENTS.pdf Pharmacognosy chapter 5 diploma in Pharmacy
 
Plant Tissue culture., Plasticity, Totipotency, pptx
Plant Tissue culture., Plasticity, Totipotency, pptxPlant Tissue culture., Plasticity, Totipotency, pptx
Plant Tissue culture., Plasticity, Totipotency, pptx
 
3.12.24 Freedom Summer in Mississippi.pptx
3.12.24 Freedom Summer in Mississippi.pptx3.12.24 Freedom Summer in Mississippi.pptx
3.12.24 Freedom Summer in Mississippi.pptx
 
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
HỌC TỐT TIẾNG ANH 11 THEO CHƯƠNG TRÌNH GLOBAL SUCCESS ĐÁP ÁN CHI TIẾT - HK2 (...
 
POST ENCEPHALITIS case study Jitendra bhargav
POST ENCEPHALITIS case study  Jitendra bhargavPOST ENCEPHALITIS case study  Jitendra bhargav
POST ENCEPHALITIS case study Jitendra bhargav
 
Pharmacology chapter No 7 full notes.pdf
Pharmacology chapter No 7 full notes.pdfPharmacology chapter No 7 full notes.pdf
Pharmacology chapter No 7 full notes.pdf
 

Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do

  • 2. THE HIDDEN INFLUENCE OF PROBABILITY AND STATISTICS ON EVERYTHING YOU DO KA I S E R F UNG New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto
  • 3. Copyright © 2010 by Kaiser Fung. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 WFR/WFR 1 9 8 7 6 5 4 3 2 1 0 ISBN 978-0-07-162653-8 MHID 0-07-162653-0 McGraw-Hill books are available at special quantity discounts to use as premiums and sales promotions or for use in corporate training programs. To contact a representative, please e-mail us at bulksales@mcgraw-hill.com.
  • 6. Contents Acknowledgments vii Introduction ix 1 Fast Passes / Slow Merges 1 The Discontent of Being Averaged 2 Bagged Spinach / Bad Score 25 The Virtue of Being Wrong 3 Item Bank / Risk Pool 63 The Dilemma of Being Together 4 Timid Testers / Magic Lassos 95 The Sway of Being Asymmetric 5 Jet Crashes / Jackpots 137 The Power of Being Impossible Conclusion 155 Notes 183 Index 205 v
  • 8. Acknowledgments I would like to acknowledge the guidance and assistance of Grace Freedson, Michele Paige, Micah Burch, Kate Johnson, Steven Tuntono, Beth McFadden, Talbot Katz, and my editors, John Aherne and Joseph Berkowitz. My two sisters and brother made invaluable contributions as my most plain-spoken critics. In addition, throughout this project, I was inspired by fans of my Junk Charts blog, www.junkcharts.typepad.com. vii
  • 10. Introduction T his is not another book about “damned lies and statistics.” That evergreen topic has inspired masterworks from Darrell Huff, John Allen Paulos, Ed Tufte, and Howard Wainer, among others. From the manipulative politician to the blundering ana- lyst, from the amateur economist to the hard-selling advertiser, we have endless examples of what can go wrong when numbers are misused. Cherry-picking, oversimplifying, obfuscating—we have seen them all. This book takes a different direction, a positive position: I am interested in what happens when things go right, which is to say, what happens when numbers don’t lie. The More We Know We Don’t Know What will we learn from Bernie Madoff, the New York–based fund manager–swindler who impoverished an exclusive club of well-to-do patrons over three decades until he confessed in 2008? Or from the Enron executives whose make-believe accounting wiped out the retirement savings of thousands of employees? Per- haps we ought to know why the reams of fi nancial data, printed statements, and official fi lings yielded few clues to the investors, auditors, and regulators who fell for the deception. ix
  • 11. x INTRODUCTION What will we learn from the Vioxx debacle in which the Food and Drug Administration conceded, five years after blessing its initial release, that the drug had caused ten thousand heart attacks? Perhaps we ought to know why widely available health and medi- cal information and greater scale and sophistication of clinical tri- als did not spare Vioxx inventor Merck, doctors, or patients from overlooking the deadly side effects. We ought also to ask why, despite having access to torrents of stock data and company reports, most of us have not made a killing in the stock market. Despite tallying up the nutritional informa- tion of every can and every packet of food, most of us have not achieved the hoped-for bodily downsizing. Despite heavy invest- ment in information technology, fl ight delays and traffic jams continue to get worse. Despite detailed records of our shopping behavior, many companies have but the slightest clue when we call their service centers. Despite failing to arrest cancer in patients during large-scale clinical trials, beta-carotene and vitamin pills keep flying off the pharmacy shelves. These examples reveal the unpleasant surprise that the mod- ern obsession with measurement has made us none the wiser. We collect, store, process, and analyze more information than ever before—but to what end? Aristotle’s wisdom has never been more relevant than it is today: the more we know, the more we know we don’t know. Stories of a Positive Nature We begin to overcome these failures by examining positive exam- ples of how enterprising people are making sensible use of the new information to better our world. In the next five chapters, you will meet engineers who keep the traffic flowing on Minnesota high-
  • 12. INTRODUCTION xi ways, disease detectives who warn us about unsafe foods, actuaries who calculate how much Floridians must pay to insure homes against hurricanes, educators who strive to make standardized tests like the SAT fair, lab technicians who scrutinize blood samples from elite athletes, data miners who think they can detect our lies, lottery operators who face evidence of fraud, Walt Disney scien- tists who devise ever-clever ways to shorten queues, mathemati- cians whose ideas have set off the explosion of consumer credit, and researchers who offer the best tips for air travel. These ten portraits feature some special men and women whose work is rarely celebrated openly. The reason for this neglect is that their achievement is not of invention, for which we shower awards and accolades, but of adaptation, of refinement, of salesmanship, and of perseverance. Their expertise is applied science. The Statistical Way of Thinking For me, these ten stories ultimately merge into one: all of these exemplary scientists rely on the statistical way of thinking, as dis- tinct from everyday thinking. I organize the stories into five pairs, each dealing with an essential statistical principle. What is so unconventional about the statistical way of thinking? First, statisticians do not care much for the popular concept of the statistical average; instead, they fi xate on any deviation from the average. They worry about how large these variations are, how frequently they occur, and why they exist. In Chapter 1, the experts studying waiting lines explain why we should worry more about the variability of waiting time than about its average. Highway engineers in Minnesota tell us why their favorite tactic to reduce congestion is a technology that forces commuters to wait
  • 13. xii INTRODUCTION more, while Disney engineers make the case that the most effec- tive tool to reduce wait times does not actually reduce average wait times. Second, variability does not need to be explained by reason- able causes, despite our natural desire for a rational explanation of everything; statisticians are frequently just as happy to pore over patterns of correlation. In Chapter 2, we compare and contrast these two modes of statistical modeling by trailing disease detec- tives on the hunt for tainted spinach (causal models) and by prying open the black box that produces credit scores (correlational mod- els). Surprisingly, these practitioners freely admit that their models are “wrong” in the sense that they do not perfectly describe the world around us; we explore how they justify what they do. Third, statisticians are constantly looking out for missed nuances: a statistical average for all groups may well hide vital differences that exist between these groups. Ignoring group differ- ences when they are present frequently portends inequitable treat- ment. The typical way of defi ning groups, such as by race, gender, or income, is often found wanting. In Chapter 3, we evaluate the mixed consequences that occur when the insurance industry adjusts prices to reflect the difference in the amount of exposure to hurricanes between coastal and inland properties, as well as what happens when designers of standardized tests attempt to eliminate the gap in performance between black and white students. Fourth, decisions based on statistics can be calibrated to strike a balance between two types of errors. Predictably, decision makers have an incentive to focus exclusively on minimizing any mistake that could bring about public humiliation, but statisticians point out that because of this bias, their decisions will aggravate other errors, which are unnoticed but serious. We use this framework in Chapter 4 to explain why automated data-mining technologies cannot identify terrorist plots without infl icting unacceptable col-
  • 14. INTRODUCTION xiii lateral damage, and why the steroid-testing laboratories are inef- fective at catching most of the cheating athletes. Finally, statisticians follow a specific protocol known as statis- tical testing when deciding whether the evidence fits the crime, so to speak. Unlike some of us, they don’t believe in miracles. In other words, if the most unusual coincidence must be contrived to explain the inexplicable, they prefer leaving the crime unsolved. In Chapter 5, we see how this powerful tool was used to uncover extensive fraud in a Canadian state lottery and to dispel myths behind the fear of flying. These f ive principles are central to statistical thinking. After reading this book, you too can use them to make better decisions. The Applied Scientist at Work These stories take a shape that reflects my own experience as a practitioner of business statistics. They bring out aspects of the applied scientist’s work that differ substantively from that of the pure or theoretical scientist. All the examples involve decisions that affect our lives in one way or another, whether through public policies, business strat- egies, or personal choices. Whereas the pure scientist is chiefly concerned with “what’s new,” applied work must deal with “how high,” as in “how high would profits go?” or “how high would the polls go?” In addition to purely technical yardsticks, applied scientists have goals that are societal, as with the Minnesota high- way engineers; or psychological, as with the Disney queue manag- ers; or financial, as with hurricane insurers and loan officers. The pursuit of pure science is rarely limited by time; as an extreme example, mathematician Andrew Wiles meticulously
  • 15. xiv INTRODUCTION constructed his proof of Fermat’s last theorem over seven years. Such luxury is not afforded the applied scientist, who must deliver a best effort within a fi nite time limit, typically in the order of weeks or months. External factors, even the life cycle of green produce or the pipeline of drug innovations, may dictate the con- straint on time. What use would it be to discover the cause of an E. coli outbreak the day after the outbreak dies down? What is the point of developing a test for a designer steroid after dozens of ath- letes have already gained unfair advantage from using it? Some of the most elegant achievements in pure science result from judiciously choosing a set of simplifying assumptions; the applied scientist adapts these results to the real world by noticing and then coping with inconvenient details. If you have read the writings of Nassim Taleb, you will recognize the bell curve as one such simplification that demands refinement in certain situations. Another example, considered in Chapter 3, is lumping together distinct groups of people when they should be treated differently. Successful applied scientists develop a feel for the decision- making process: they know the key influencers, they grasp their individual ways of thinking, they comprehend their motivations, and they anticipate sources of confl ict. Crucially, they repackage their logic-laced messages to impress their ideas upon those who are more comfortable with intuition or emotion than with evi- dence. Because understanding the context is so valuable to the applied scientist’s work, I have included a wealth of details in all of the stories. To sum up, applied science has measures of success distinct from those used in theoretical science. For instance, Google recognized this distinction by rolling out its famous “20 percent” time policy, which allows its engineers to split their week between pure science projects of their choosing and applied projects (with an 80 percent emphasis on the latter!).
  • 16. INTRODUCTION xv More And there is something extra for those who want more. The Con- clusion of this book serves a dual purpose of consolidation and extension. While summarizing the statistical way of thinking, I introduce the relevant technical language in case you should want to cross-reference a more conventional book. To illustrate how universal these statistical principles are, I revisit each concept in a new light, harnessing a different story from the one originally selected. Finally, the Notes section contains further remarks as well as my main sources. A complete bibliography is available at the book’s link on my website, www.junkcharts.typepad.com. Numbers already rule your world. And you must not be in the dark about this fact. See how some applied scientists use statistical thinking to make our lives better. You will be amazed how you can use numbers to make everyday decisions in your own life.