Naked statistics, or How to win a million?

Statistics akin to the profession of a detective. Conducting investigations - with evidence and suspects. The book of Charles Whelan - the first book on statistics, which is interesting to read. Fasten your seat belts, we go into the world of statistics!

Why do you need statistics?

I confess that once in despair I ripped one book on statistics. Therefore, when I wrote this book, I did everything so that you would not have such a desire. Why do we need statistics? Our world is faster and faster generating large amounts of data. Find out about someone, googling his name? Easy. To choose a school for a child according to open rankings? And there are already many pitfalls.

Any data - only the source material of knowledge, and to make the right conclusion, you need to know how to handle them. Without statistics tools, we are with this data - like a man without a compass in an unfamiliar forest.

And that is not all. Hol Varian, chief economist at Google, in an interview with The New York Times said that in the next decade, working with statistical data will become a “fashionable profession,” or rather, “sexual” (literal expression: the sexy job). It's time to meet her.

Statistics helps to see the truth where it can be hidden from the eyes.

The main thing - the right to submit!

Mark Twain said: "There is a lie, a blatant lie and statistics." If people misunderstand the statistics, their findings become dangerous. Consider a hypothetical news: "People who take short breaks during a day are more likely to die from cancer."

According to a survey of 36,000 workers, those who left the office for regular 10-minute breaks had a 41% higher chance of getting cancer in the next five years than those who did not leave offices.

It is clear that having learned such news, we are obliged to react to it somehow: refuse short breaks? Or maybe think about what exactly the employees usually do during these ten minutes? Not for me to tell you that many people smoke. That is the cause of cancer.

This is an exaggerated example, but there are many such cases in life. Statistics twirl, as they want. And it is important to learn to notice it.

How to win a million?

Delma Kinney, a resident of Atlanta, won the $ 1 million lottery, three years later - the same amount. The probability of such a situation is 1 to 25 trillion! This is 40 million times less than the possibility of lightning falling into a person. But what does lottery statistics say?

Take a one-dollar instant lottery ticket. Chances to win prizes are printed on its back side: 1 chance out of 10 (free lottery ticket) and so on, up to 1 chance out of 40,000 - to win $ 1000.

The expected income for this ticket can be calculated. It turns out that it is about 56 cents. It turns out that if you spend one million dollars to buy lottery tickets, the gain will be about 560,000 dollars.

And in order to "win" a million - you need to spend much more. Thus, buying a lottery ticket is an absolutely talentless way to spend money.

Probability theory in action

Our fears are not always adequate to what the numbers tell us about the real danger. Simply put, we fear the wrong thing. Can you imagine a swimming pool in the yard more dangerous than a loaded revolver stored in a closet? Scientists have calculated: the probability that a child under the age of 10 years will sink in the pool is 100 times higher than the chance that he would accidentally shoot himself while playing with a revolver.

Probability does not tell us what will happen for sure; it only warns that it can occur with a high degree of probability or with a less high one. And also that it is certainly not necessary to extrapolate (carry over to the future) your conclusions - they are not always true.

You can use probability theory at work and in everyday life. How? Yes Easy. Imagine your child brought a “two” for the control. Justified by the fact that all received bad grades. But you can catch the bastard. Probability theory says: everyone cannot answer equally wrong - the probability of such a scenario is small. Conclusion? All wrote off the wrong answer from someone from classmates. Elementary Watson!

The neighbor eats meat, you - cabbage, and on average you eat cabbage rolls

Statistical "renegades" are values ​​that deviate sharply from the average. They must be taken into account, because they strongly distort any calculations. Imagine 10 people sitting at the bar of some places. Each of them earns $ 35 thousand a year. Therefore, the average annual income of this group is $ 35,000.

Suddenly Bill Gates enters the establishment and sits on the eleventh chair behind the bar. At the same time, the average annual income of people in a bar rises sharply to $ 91 million dollars. If you write that the average income of visitors to the institution is $ 91,000,000, then this conclusion would be statistically correct. However, it would have nothing to do with the real state of affairs.

Therefore, information on TV about the increase in per capita income does not always dock with reality.

"Based on statistics, it is easy to lie, but without statistics it is very difficult to find out the truth." This thought was expressed by the Swedish mathematician Andrejs Dunkelson. "Naked statistics" proves that it is fair.

Statistics are like powerful weapons, useful when used correctly and potentially destructive in inept hands. If you understand statistics, you can look deeper and more closely at life, see the connection between many phenomena and apply this knowledge to your advantage.

According to the book "Naked Statistics" by Charles Whelan.

Watch the video: Make Money Selling Naked Puts - How I Make An Extra $3k - $5k Per Month In The Stock Market (December 2019).


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