Are there benefits to gaining a strong statistical background?

Prior to being a Psychology undergraduate, I was blissfully unaware of the statistical voyage that I would be embarking upon in my years as a student here at Bangor University. My academic background is hardly that of a mathematician, in fact, I’m pretty sure that I have done everything in my will to avoid anything that involved or even sounded like maths. So, as you can imagine, my arrival here at Bangor was quite intimidating as statistics were thrust upon us all from day one. As the weeks went by statistics soon became less intimidating and the tightening sensation in the pit of my stomach soon became fainter.

As I progressed though my first semester I was actually finding alternate uses for skills I had learnt in my statistics lectures, I was becoming more adept with statistics and wanted to apply the skills I had learnt in my lectures to the world around me; I was enjoying my lectures on probability in particular. I found many ways of applying my knowledge, with my favourite example being roulette; a game of chance and probability. I am not encouraging those reading this blog to start gambling nor am I condoning it, but, in the short time that I experimented with playing it I managed to win a nice amount of money. I firmly believe that the success I attained was aided by the fact that I had acquired a real understanding of probability, and I attribute this level of understanding to my statistics module; although this example is slightly controversial it is still valid as it is a real world application of statistics.
Whether we like it or not we are faced with statistics as a daily occurrence, whilst watching or listening to the news we are more often than not presented with facts and figures usually regarding ominous issues such as increasing numbers of teenage pregnancies, unemployment and crime rate etc. (http://www.statistics.gov.uk/hub/index.html)

Before these statistics can be presented to the general public it is somebody behind the scenes’ job to take large quantities of data; organize it, summarize it and interpret it; a process I was oblivious to prior to my enrolment on this course. It is highly beneficial, if not essential, to have a strong understanding of statistics in most jobs. Statistics are usually informative and time-saving, they condense large quantities of information into a few simple figures; an invaluable attribute in any workplace.

I will leave you with one last example illustrating why a strong understanding of statistics is beneficial, the example I have chosen is regarding ‘payday loans’.

‘Payday loans let you borrow from £50 to £1,000 for a few days or up to a month until you get paid the following month. Payday loan companies typically charge up to £30 for every £100 cash loan you borrow for up to 31 days. This may sound reasonable on the face of it, but it equates to an APR (annual percentage rate) of a whopping 2,255%.’ (http://www.uswitch.com/loans/payday-loans/)
If having a strong understanding of statistics can prevent me or anyone else from ending up in a situation where I am paying 2,255% APR then it is highly beneficial.
If you would like a closer look at the small print on a pay day company’s website please follow these links, it’s actually very interesting.
http://www.quickquid.co.uk/fee-schedule.html

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4 thoughts on “Are there benefits to gaining a strong statistical background?

  1. The way that you have set your argument up is really good! Even though we learnt about probability does this really apply to roulette? For instance if the more blacks that you get, are you really more likely to get a red? http://www.kanzen.com/analysis.html. Here it states that it is a 50/50 chance on what you get. The thing about the pay day loans is absolutely true! The deal might look really good, but in actual fact you are paying far too much than you would really want to! Another thing which you might consider when thinking if a background in stats is useful, is looking at beauty adverts. They always have products where they have conducted tests. But can we really trust that these are accurate and reliable. For instances they always have a small sample, which might not be a representative sample of the population. So it leads to question whether we can actually trust the product. This is another way in which could use our knowledge of stats. Here is an example of one such adverts L’Oreal ‘Age Re- Perfect Advert: http://www.tellyads.com/show_movie.php?filename=TA2449

    • Haha, I am glad you have asked. Roulette is all about probability and yes it is 50/50 as to whether you land on black or red, if that’s the way in which you want to play the game. By using the knowledge I had learnt in the first year I managed to devise a fail-safe tactic for winning money. If you were to bet on just the colours alone, as you have stated there will be a 50/50 chance of the ball landing on either black or red. But this can work in your favour, I will let you into a little secret. You can actually beat the casino by just keeping betting on the same colour but doubling your bet with each spin of the wheel, so for example to begin I bet £10 on black, then £20, then £40, £80, £160 and so on. By adopting this method you can lose your bet an infinite amount of times in a row, but if you keep doubling your bets regardless and win just once – you will win all of the money back that you have lost plus the amount you first put on. So for example you lose your first five bets which are £10, £20, £40, £80 and £160 but you win on your sixth go, the go that you bet £320. £10, £20, £40, £80, £160 and £320 add up to £630. But your winnings on this bet would be £320 x 2 which is £640, £10 more than what you’ve lost which means you are £10 up so to speak. If you just win once with this method you will win back all of the money you lose plus the amount that you initially first bet with. If your feeling even more daring, you could keep doubling until you win two in a row, if you did win your seventh bet in this example you would win an extra £640, just by guessing correctly 2/7 times. I hope that this has helped, although it might be a bit of a confusing explanation. You are completely right about the use of statistics in beauty cosmetics adverts, the statistics they refer to are pretty awful.

  2. I’m going to stay away from the betting side of thing, knowing little about gambling games such as roulette. However, as weird as this sounds, I am glad you have found a kind of love for maths, especially statistics – conditioning with the money winning and all! I really like how you apply the blog title to your life, not statistics in general, and you have some good examples. I definitely agree with you that statistical understanding is needed in a variety of jobs, whether it be the whole of statistics understood, or only the bits actually needed for a profession. I also like your example of the loan advert – the fact that people actually buy these things amazes me; surely no matter how ignorant you are of statistics, you could calculate the ridiculous amount of interest you would be paying? Surely it would be more simple to be a bit tight with money for a while, then have money now and then be even tighter for money in the future? That’s my opinion anyway!!!

  3. Pingback: Comments for Week 3 | psud6e

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