What the Numbers Say: A Field Guide to Mastering Our Numerical World - Softcover

Niederman, Derrick; Boyum, David

Softcover

ISBN 10: 0767909992 ISBN 13: 9780767909990

Verlag: Crown, 2004

Inhaltsangabe

Our society is churning out more numbers than ever before, whether in the form of spreadsheets, brokerage statements, survey results, or just the numbers on the sports pages. Unfortunately, people’s ability to understand and analyze numbers isn’t keeping pace with today’s whizzing data streams. And the benefits of living in the Information Age are available only to those who can process the information in front of them.

What the Numbers Say offers remedies to this national problem. Through a series of witty and engaging discussions, the authors introduce original quantitative concepts, skills, and habits that reduce even the most daunting numerical challenges to simple, bite-sized pieces. Why do the nutritional values on a Cheerios box appear different in Canada than in the U.S.? How is it that top-performing mutual funds often lose money for the majority of their shareholders? Why was the scoring system for Olympic figure skating doomed even without biased judges?

By anchoring their discussions in real-world scenarios, Derrick Niederman and David Boyum show that skilled quantitative thinking involves old-fashioned logic, not advanced mathematical tools. Useful in an endless number of situations, What the Numbers Say is the practical guide to navigating today’s data-rich world.

Über diesen Titel

Über die Autorin bzw. den Autor

DERRICK NIEDERMAN received a B.A. in mathematics from Yale and a Ph.D. in mathematics from MIT. He is the author of This Is Not Your Father’s Stockpicking Book, The Inner Game of Investing, and A Killing on Wall Street. DAVID BOYUM received a B.A. in applied mathematics and a Ph.D. in public policy from Harvard. He has been a visiting scholar at the Yale School of Management and a Robert Wood Johnson Scholar in Health Policy Research at Yale.

"From the Hardcover edition.

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1.

The Quantitative Information Age

Whether we realize it or not, quantitative information pervades our professional and personal lives. Every time a doctor reads a patient's chart, a farmer weighs a hog, a businesswoman reviews a budget, or a driver glances at a speedometer, someone is seeking quantitative information. And thanks to computers and the Internet, numbers are spreading faster than deer populations. A few years back, a car shopper found it hard to get much in the way of guidance--a magazine article here, a friend's opinion there. Now, a little web surfing reveals sticker and invoice prices, dealer holdbacks and incentive packages, depreciation estimates, customer satisfaction ratings, reliability statistics, expected insurance costs, crash test results and various accident, injury, and fatality rates, not to mention a wealth of financing data. We may say we live in the "Information Age," but it might be more accurate to say we live in the "Quantitative Information Age."

As technology builds this crescendo of numbers, our ability to make wise decisions, whether at work or at home, increasingly depends on proficiency with quantitative information. Unfortunately, Americans seem much better at producing numbers than making sense of them. It was to underscore this point that cognitive scientist Douglas Hofstadter coined the term "innumeracy," a word brought into the national spotlight by John Allen Paulos's pathbreaking book of the same name.1 But identifying educational failures is far easier than remedying them, and while countless books, articles, and government reports have diagnosed the widespread ailment of poor quantitative thinking, they have not provided therapy. Or at least not much of it. That's where this book comes in. Our goal is to introduce you to the quantitative concepts, skills, and habits you need for success in work, and success in life.

Sounds dreadful, doesn't it? Yet another remedial math book. Well, if that's what you're expecting, we've got good news. It turns out that formal mathematics is not the best way to teach quantitative thinking, and superior quantitative reasoning is not restricted to those who aced high school math.

Imagine, if you will, the work of an accountant, green eyeshade and all. Few jobs involve greater contact with numbers, and quantitative skills are an obvious prerequisite. If an accountant isn't good with figures, he might not notice a liability that has been excluded from a company's balance sheet, or a depreciation charge that has been miscalculated. Yet how much advanced mathematics is required to assess numbers on financial statements? These numbers get added, subtracted, multiplied, divided, and displayed as fractions, decimals, and percentages. They don't get expressed as Gaussian integers. The last time we looked at a financial statement, we didn't see a --, a , a u, or a $.

Think about other professional occupations--architects, doctors, management consultants, financial planners, marketing executives. Again, large amounts of quantitative information are a feature of many such jobs, and good quantitative thinking is critical to doing the jobs well. But matrix algebra is not required. Nor are high school staples such as quadratic equations, analytic geometry, and imaginary numbers.

This is why high school math teachers fear nothing more than the question, "Why do I need to learn this?" The conventional response, "Because you'll need the skill in your job," is dishonest, because even if the class contains some future engineers, they aren't the ones asking the question. The more honest reply, "Because you'll need it for the SAT," wins points for candor but loses them right back to overt cynicism. Thomas Jefferson's endorsement of mathematics--"The faculties of the mind, like the members of the body, are strengthened and improved by exercise"2--is closer to our idea of why the study of math is so essential, but we admit that such an argument will hardly motivate apathetic teenagers.

But if math isn't the key to good quantitative thinking, what in the world is inside this book? Here's a sneak preview. What distinguishes good quantitative thinkers is not their skill with pure mathematics, but rather their approach to quantitative information. Effective quantitative thinkers possess certain attitudes, skills, and habits that they bring to bear whenever they need to make decisions based on numbers. And with rare exception, these attitudes, skills, and habits are not taught in math classes or textbooks. For example, good quantitative thinkers demand empirical evidence instead of conventional wisdom. At the same time, they assume that figures are often wrong or misleading. Good quantitative thinkers don't examine quantitative information until they have a strategy for doing so. They know that some numbers are far more important than others, and they systematically pare data in an effort to find the most revealing figures. They also make lots of rough estimates, scribble on the backs of envelopes, and use arithmetic shortcuts like the Rule of 72. These are the skills we intend to convey.

Now for the most welcome news of all: In showing you the ways of good quantitative thinkers, we are confident that you already know all the math you need. We may jog your memory from time to time, but we're talking about the basics--arithmetic, percentages, fractions, decimals, square roots, and exponents. If you're still stumped every time you hear someone say, "That's six of one, a half dozen of the other," then perhaps you do need a remedial math book. But otherwise you've come to the right place and we're delighted to have you aboard. Be prepared to see numbers in a brand new light.

2.

The Ten Habits of Highly Effective Quantitative Thinkers

When Shaquille O'Neal accepted the NBA's Most Valuable Player award in 2000, he quoted Aristotle: "Excellence is not a singular act, but a habit. You are what you repeatedly do." Classicists might quibble with Shaq's translation of The Nicomachean Ethics, but in our view he was right on the money. Excellence in anything is the product of practice. That's especially true of quantitative reasoning, which doesn't come naturally to any of us. It seems to be our fate to enter this world with lousy quantitative instincts, as if Adam miscounted the fruit on the tree of knowledge and forced all of us to suffer for his arithmetic sin. Or, to put the same thought in more secular terms, the remote ancestors whose struggle for survival shaped our genetic makeup faced an environment where quantitative skills were not especially important in solving the problem of finding a meal without becoming a meal.

Like the young tourist asking how to get to Carnegie Hall, someone asking the way to good quantitative thinking must be told, "Practice, practice, practice." But what are you practicing? Ideally, habits that foster effective quantitative thinking. Thanks to Stephen Covey's best-selling books (The 7 Habits of Highly Effective People and its offshoots), seven has become the canonical number for lists of good habits. However, for those born into a decimal system, seven is an awkward number. Neurologists test for dementia by asking patients to serially subtract 7, starting from 100, precisely because 7 doesn't create simple patterns. Highly effective quantitative thinkers understand the advantages of working with round numbers, particularly powers of ten: quicker calculations, fewer errors, better recall. That, and the examples of Moses and David Letterman, has led us to make a list of ten--or, perhaps, the top ten--habits of effective quantitative thinkers. Some of these habits are intertwined, but that's no problem. Because 10 is a composite number (unlike, for example, 7), we can display our...

Details zur Ausgabe

• Verlag: Crown
• Erscheinungsdatum: 2004
• Sprache: Englisch
• ISBN 10: 0767909992
• ISBN 13: 9780767909990
• Einband: Taschenbuch
• Anzahl der Seiten: 288
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: preigu; mail@preigu.de; ; Lengericher Landstr. 19; Osnabrück; 49078; Deutschland