Penmachine

One of my repeated themes here over the years is how genuinely lousy the human brain is at intuitively understanding probability and statistics. Two articles this week had me thinking about it again.

The first was Clive Thompson's latest opinion piece in Wired, "Why We Should Learn the Language of Data," where he argues for significantly more education about stats and probability in school, and in general, because:

If you don't understand statistics, you don't know what's going on—and you can't tell when you're being lied to.

Climate change? The changing state of the economy? Vaccination? Political polls? Gambling? Disease? Making decisions about any of them requires some understanding of how likelihoods and big groups of numbers interact in the world. "Statistics," Thompson writes, "is the new grammar."

The second article explains a key example. At the NPR Planet Money blog (incidentally, the Planet Money podcast is endlessly fascinating, the only one clever enough to get me interested in listening to business stories several times a week), Jacob Goldstein describes why people place bad bets on horse races.

After exhaustive statistical analyses (alas, this stuff isn't easy), economists Erik Snowberg and Justin Wolfers have figured out that even regular bettors at the track simply misperceive how bad their bets are, especially when wagering on long shots—those outcomes that are particularly unlikely, but pay off big if you win, because:

...people overestimate the probability of very rare events. "We're dreadful at perceiving the difference between a tiny probability and a small probability."

In our heads, extremely unlikely things (being in a commercial jet crash, for instance) seem just as probable, or even more probable, than simply somewhat unlikely things (being in a car crash on the way to the airport). That has us make funny decisions. For instance, on occasion couples (parents of young children, perhaps) choose to fly on separate planes so that, in the rare event that a plane crashes, one of them survives. But they both take the same car to the airport—as well as during much of the rest of their lives—which is far, far more likely to kill them both. (Though still not all that likely.)

Unfortunately, so much of probability is counterintuitive that I'm not sure how well we can educate ourselves about it for regular day-to-day decision-making. Even bringing along our iPhones, I don't think we should be using them to make statistical calculations before every outing or every meal. Besides, we could be so distracted by the little screens that we step out into traffic without noticing.

Our minds are required be good at filtering out irrelevancies, so we're not overwhelmed by everything going on around us. But the modern world has changed what's relevant, both to our daily lives and to our long-term interests. The same big brains that helped us make it that way now oblige us to think more carefully about what we do, and why we do it.

Labels: airport, games, magazines, podcast, probability, psychology, radio, transportation