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I am a data scientist who works a lot with statistics. With so much data we handle and information to consume, people who work with statistics become adept at understanding how to draw conclusions from the data and how uncertain those conclusions might be. This allows data professionals to calculate the reliability of the findings and communicate potential errors in the results.
As I became accustomed to working with statistics, I gained many insights from the field that apply to everyday life. These insights affect how I approach decision-making and navigating day-to-day life, ultimately improving both my personal and professional lives.
So, what are these unexpected life insights you can learn from statistics?
1. Comfortable with Risk and Uncertainty
Statistics deal with a lot of uncertainty in the data, as many statistical inferential methodologies involve drawing conclusions from the data but with potential errors. With statistics, we try to understand what happens in the real world; the field teaches us that the real world is full of uncertainty and risk always exists.
No matter the situation — whether you are leaving your job to build a business, investing in the stock market, or walking around the park — there is always a probability for any desirable and undesirable event to happen. By understanding statistics, we can evaluate how comfortable we are with the probability of the outcomes and make much more reliable decisions.
So, we don’t need to fear taking risks as we can try to evaluate them, and everything we do inherently always comes with uncertainty.
2. Understanding the Power of Small Changes
Many times in life, we do not think that something we do now will become important in the future or that it’s a lost cause. Yet, it can’t be further from the truth, as data and statistics teach us something different: there are compounding effects. Compounding effects in statistics refer to the impact of repeated actions over time, usually in an exponential manner.
The data has shown that things might fluctuate, but investments would always compound, leading to exponential growth over time. It’s also applicable in life; you can start small and do small things every day, but they would lead to massive growth along the way.
Whatever you do, if you make small changes and remain consistent, you can achieve greatness someday.
3. Avoid Overgeneralization
The more data we have, the more reliable the conclusions we can infer from the population the sample is taken from. However, the results can be biased if we don’t have enough relevant data or if the data is not randomized during collection (biased samples). The conclusion can lead to overgeneralization of the population.
This is what could happen in life as well. Many people make conclusions about certain events or groups based on biased samples or a small amount of data. As data professionals, we should understand that one or two sample representations should not represent the whole thing — there is always an exception.
We can avoid overgeneralization and prejudice based on limited experiences by learning from statistics.
4. Improve Financial Management
Statistics taught me how to understand statistical numerical concepts better than most people. From knowing what means, medians, data distributions, and hypothesis testing are, among others. In a way, statistical knowledge helps me make better financial decisions and understand the effect of each choice on my money.
By understanding how data and statistics work, we can analyze our spending patterns and forecast future financial needs based on those patterns. I always try to improve my financial standing by analyzing my current situation and forecasting my future financial life if I perform certain activities. Combined with compounding, we can manage our finances well with statistics.
5. Emphasize the Importance of Context in Communication
In the past, there was a statistical introductory book called “How to Lie with Statistics,” written by Darrell Huff in 1954. The book is directed at a general audience instead of statisticians, with one of the points describing how statisticians can distort reality with inadequate visualization. That’s how powerful statistics can be; you can say that the data supports our intended claim, but it’s not true.
Communication is an important part of our everyday life, and statistics can teach us that data can have different meanings depending on how we present it and the context. As we can present our information in any frame, we must be careful to avoid spreading false information.
With statistics, communication becomes crucial as we can frame it as we require, so we should be careful when communicating information.
Conclusion
Statistics seems so technical and far from applicable in everyday life; however, statistics can unexpectedly affect life. This article has explored five ways learning statistics could improve our everyday lives. From changing our mindset to directly applying it to our lives, statistics affects us all.
