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Articles

Statistics are more important than emotions

  • CFO notes,
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Recently I came across a comparison of two graphs, the left one shows the real behavior of statistics regarding the number of crimes, and the right one shows how people feel about the criminal situation. 

Regardless of how data are collected and how they are interpreted, I would like to draw attention to the fact that statistics shows values for a certain period, and within this period it is possible to fix a trend and a minimum and maximum, and within the framework of this statistics a period of more than 40 years is taken. In this case, people purely emotionally remember only a short period of time, within which, they are more inclined to what they experienced themselves, without relative to how it is on a general scale. After all, if you are a victim of theft, you will think that the number of thefts has gone up because you were affected, when in fact, the number of thefts will go down, as shown in the graphs.

But my point is different, the point is that in business we often do the same thing, we look at some metric and seeing its dynamics, we think that everything is going the same way, but in fact, we see some local case, which just showed a temporary deviation, and sometimes it is not related to the business goal at all. I described a very similar thing in card #41.

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