Why Thinking-by-Numbers Is the New Way to Be Smart
October 29, 2007
An introduction to econometrics may not seem like the stuff that would keep listeners riveted—much less awake—during a long car ride, but Ayres’s provocative audio does just that. Ever wonder how an airline decides to lower its prices? Or why businesses have preferred shopper cards? The answer is data, gigabytes upon terabytes of data. Companies are increasingly relying on data and number-crunching statisticians to make decisions, like how much money they can extract from consumers while still retaining their loyalty. Ayres’s exploration of “super crunching” and its influence makes up the bulk of the audio, but listeners needn’t navigate a sea of numbers. The discussion is illustrated by eye-opening examples such as how Continental Airlines took customer service to a new, personalized level and how Mexico instituted an innovative pay-for-performance parenting program. The final chapter on standard deviations may have some longing for the printed page or a PDF file with a graph or two, but overall, Lurie’s mellow reading will make listeners firm believers in Ayres’s refrain: “in a super crunching world, consumers can’t afford to be asleep at the wheel.” Simultaneous release with the Bantam hardcover (Reviews, June 4).
June 4, 2007
Yale Law School professor and econometrician Ayres argues in this lively and enjoyable book that the recent creation of huge data sets allows knowledgeable individuals to make previously impossible predictions. He calls the data set analysts “super crunchers” and discusses the changes they're making to industries like medical diagnostics, air travel pricing, screenwriting and online dating services. Although Ayres presents both sides of this revolution, explaining how the corporate world tries to manipulate consumer behavior and telling consumers how to fight back, his real mission is to educate readers about the basics of statistics and hypothesis testing, spending most of his time in an edifying and entertaining discussion of the use of regression and randomization trials. He frequently asks whether statistical methods are more accurate than the more intuitive conclusions drawn by experts, and consistently concludes that they are. Ayres skillfully demonstrates the importance that statistical literacy can play in our lives, especially now that technology permits it to occur on a scale never before imagined.