“Cold hard facts” like 32 degrees, 26 touchdowns, and 8 billion dollars trip us up. But what can be so confusing about simple numbers?
Numbers anchor our thinking. The run-up of mortgage interest rates drew the headlines rather than the typical monthly payment. Humans are relative thinkers and initial numbers frame our thinking.
There are also contextual clues to each number we see. Forty degrees can be cold or warm depending on the humidity, sunlight, wind, precipitation as well as our exertion. Ideal marathon conditions are for the runners, not the spectators.
Lastly, numbers represent distributions of outcomes. We’ve seen this with Aaron Rodgers’ touchdown tails:
And two other January 2022 news stories. The University of Georgia football team was favored to win the national championship game by fourteen points. They won by fifty-eight.
Rather than a large error, we can think of the fourteen-point betting line as a fulcrum. That was the point that balanced bets between the most common forecast: a close TCU victory or a Georgia blowout.
Another is the estimation that Chat GPT is worth twenty-nine billion dollars. It’s not, said Ben Thompson. There’s a one-sixth chance it’s worth two hundred billion.
Numbers carry more meaning than we typically assign. Life’s numbers are presented by accountants – and we need to think like auditors.
Other posts in the numeracy series include handshake puzzles and birthday bets, the problem with hurricane categories, and white water whitewash.
There are many good books about these ideas like Tim Harford’s Data Detective and the new Covid by the Numbers by David Spiegelhalter who wants us as auditors to ask, why am I seeing this number?