A big thank you for all of you who showed up to meet me at the Princeton Library. I was very happy to see so many people interested in statistics. There were many terrific questions, and here are the first five topics that come to mind as I write this post:
- Are there cultural differences in the level of statistical thinking? Are people in certain countries more likely to do better at statistical thinking than others? I'd surely love to see some studies in this area. I suspect that there are differences. Climate change is one area, for example, where clearly the level of understanding differs by country.
- Have our politicians learn to lie less using statistics over time? Unfortunately, not. I think, or hope, the people can pick up more statistical thinking, and see through lies better. But politicians choosing to not lie, I don't think so.
- How much are quants/data people to blame for the recession? Not very much. Statistics provide tools for making decisions but they do not provide decisions. One of the key messages of Numbers Rule Your World is that people make decisions based on incentives and compromise; the data serve as a guide only. One can't blame credit scoring systems for getting it wrong when banks accept "liar loans", "no doc" loans, "ninja" loans (no income, no job, no assets).
- Explain the Monty Hall problem. (I mentioned this as the kind of toy problem that I do not use in my book.) Here's my quickest explanation: your first guess is either right or wrong; if the first guess is right, switching will make you a loser for sure; if the first guess is wrong, switching will make you a winner for sure (verify this); since there is a 1/3 chance your first guess is right and 2/3 chance your first guess is wrong, switching gives you a better chance of winning.
- Are there online resources that helps us understand economic numbers? I highly recommend Dean Baker's blog. Almost every day, he makes me laugh out loud.