A nice example of Statistical Literacy
I heard this NPR story via one of their podcasts, the “Daily Shuffle.” The economist makes a great point — when the government releases numbers that say “unemployment fell from 4.8% to 4.7%” from month to month, that change is “meaningless.” It’s not statisically significant. Comparing two data points “up” or “down” is hardly ever useful, but we do it all the time in management.
Look at the top left corner of the front page of the USA Today. They have a box, today and every day, that shows if gas prices are up or down compared to yesterday. Two data points do not make a trend! They would be better off showing a graph of the last 30 days, so we can see the trend and to see what is statistically significant — more like a control chart.
If you deal with metrics (and who doesn’t), the book that’s had the MOST impact on me in professional career… I have to recommend it, a book by Donald J. Wheeler about how to interpret management data and to avoid the types of mistakes that the media usually make.