Thousands of economics majors head off to industry each year to work as analysts. They’re lured by the promise that they’ll learn a lot, work hard, play hard and get ahead. But is it true? Who better to ask than the brilliant young analyst Elisabeth Fosslien. And as a good young analyst, she’s distilled her portrait of life as an analyst into charts. Having once lived the analyst life—my first job out of college was at the Reserve Bank of Australia, crunching numbers and making charts—all of these resonated with me.
According to a new paper by Stephen T. Ziliak, it was a brewer at the famed Guinness beer company, William Sealy Gosset, who first began to explore the concept of statistical significance:
Gosset (1876–1937) aka “Student” – he of Student’s t-table and test of statistical significance – rejected artificial rules about sample size, experimental design, and the level of significance, and took instead an economic approach to the logic of decisions made under uncertainty. In his job as Apprentice Brewer, Head Experimental Brewer, and finally Head Brewer of Guinness, Student produced small samples of experimental barley, malt, and hops, seeking guidance for industrial quality control and maximum expected profit at the large-scale brewery. In the process Student invented or inspired half of modern statistics.
Encouraging news via the Associated Press: For the first time in almost half a century, homicide has fallen off the list of the nation’s top 15 causes of death. In Mexico, meanwhile, the murder trend continues to move in the opposite direction: During the first nine months of 2011, some 12,903 people were killed in […]
In our latest Freakonomics Radio on Marketplace podcast, Stephen Dubner looks at why the first decision you make in 2012 can be riskier than you think. (Download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript.)
The risks of driving drunk are well-established; it's an incredibly dangerous thing to do, and produces massive collateral damage as well. So if you have a bit too much to drink over the holiday and think you'll do the smart thing and walk home instead -- well, that's not so smart after all. Steve Levitt has compared the risk of drunk walking with drunk driving and found that the former can potentially pose a greater risk:
In the third segment of "Football Freakonomics," Dubner examines how impressive stats in the NFL are often indicative of bad results. For example, we all want a quarterback who throws for big yardage. But for all the times a quarterback threw for 400 yards or more last season, how many of those games did his team actually win?
This is a guest post by Jeff Mosenkis, a freelance producer with Freakonomics Radio who holds a Ph.D. in psychology and comparative human development.
Nazis, Sunken Ships, And a 60 Year-Old Game of Telephone By Jeff Mosenkis
Did you hear the one about the two statisticians who go deer hunting? The first one misses his shot ten feet to the right of the deer; the second one misses ten feet to the left of the deer. They then high five each other and shout “Got him!”
While the quantitative method might not work for hunting, it apparently does for finding sunken warships. NPR’s Alix Spiegel reported this remarkable story about two Australian cognitive psychologists who used a statistical distribution to find two sunken World War II ships, 67 years after they were lost.
On the evening of November 19, 1941, the HMAS Sydney was off the coast of Western Australia when it exchanged fire with the German HSK Kormoran, and sunk with all 645 crewmen aboard. It was a national tragedy, particularly because nobody knew exactly what happened to the ship and why it sunk. The German crew scuttled their damaged ship, and 317 surviving German sailors were picked up in lifeboats at sea or on shore and interrogated.
In the Boston Globe, Andrea Estes and Scott Allen write about how people have been taking advantage of a statistical quirk in the rules of an obscure Massachusetts Lottery game called Cash WinFall. A Michigan couple in their 70s, Marjorie and Gerald Selbee, spent three days buying more than $600,000 in Cash WinFall tickets from two convenience stores in Sunderland, Mass. Their timing was purposeful:
For a few days about every three months, Cash WinFall may be the most reliably lucrative lottery game in the country. Because of a quirk in the rules, when the jackpot reaches roughly $2 million and no one wins, payoffs for smaller prizes swell dramatically, which statisticians say practically assures a profit to anyone who buys at least $100,000 worth of tickets. During these brief periods - “rolldown weeks’’ in gambling parlance - a tiny group of savvy bettors, among them highly trained computer scientists from MIT and Northeastern University, virtually take over the game. Just three groups, including the Selbees, claimed 1,105 of the 1,605 winning Cash WinFall tickets statewide after the rolldown week in May, according to lottery records. They also appear to have purchased about half the tickets, based on reports from the stores that the top gamblers frequent most.
The Mets had gone 299 games and 280 plate appearances with the bases loaded since their last grand slam, while their opponents had hit 18 during that span. So when the opportunity arose in the fourth inning Tuesday night — with Jason Bay at the plate, no less — the chance of a Mets grand slam was slim.
A reader named Sarah Johnson, who is passionate about crocheting, noticed something curious about the demographics of a user-rated knitting-and-crocheting website called Ravelry. Sarah is graduating from high school in June, and plans to major in psychology and pre-med. She writes: "I joined a free site for knitters and crocheters called Ravelry. As far as a little Internet research goes, it's one of the biggest knitting and crochet sites out there, with over 1 million members. CrochetMe, another big site with comparable features, has 224,000 users. Crochetville, a large crochet forum, has only 46,000 members as of today. 414,974 people like 'knitting' on Facebook. By comparison, only 5,560 people like 'crochet.'"
In Wired, Jonah Lehrer profiles Mohan Srivastava, a Toronto statistician who seemingly cracked the scratch-lottery ticket code. "The tic-tac-toe lottery was seriously flawed," writes Lehrer. "It took a few hours of studying his tickets and some statistical sleuthing, but he discovered a defect in the game: The visible numbers turned out to reveal essential information about the digits hidden under the latex coating. Nothing needed to be scratched off-the ticket could be cracked if you knew the secret code."