The future is unknown and unknowable. That does not stop us from looking ahead and making plans to reap desired outcomes. From experience, we’ve observed that when certain variables align, certain outcomes emerge more frequently than others. Statistics help us track these variables and their results, especially when they are recorded meticulously, and often enough to identify patterns and trends. (Here I insert a caveat that the statistics referred to in this discussion are not created with the intent to deceive. ‘Honest’ statistics are a complex enough concept to deal with).
While statistics can only help us predict possible future outcomes, their reliability falls within a certain “margin of error” due to unforeseen variables that randomly occur. Still, having a basis for tracking patterns and trends gives us more confidence in planning for the future than guesswork and alternative methods based on superstition and belief.
To be fair, superstition may be rooted in a rudimentary form of statistical analysis. Being in possession of ‘lucky’ objects, for example, may increase instances when their owners have observed experiencing ‘good’ outcomes. While correlation does not necessarily mean causation, people make the best of confirmation bias and conclude that the ‘lucky’ object, or gesture, or quirky behaviour is prerequisite to a favourable outcome, yet dismiss the times a failed outcome did, in fact, occur.
Likewise, statistics can be said to be superstition taken to extreme levels. Rather than making casual observations, statisticians record every relevant instance and their results within certain time-space-sample parameters. They are consciously looking for correlations based on frequency of cause and effect. The disclaimer is that cause and effect cannot be determined with absolute certainty, but only within a calculated level of confidence.
The wider the parameters, the more instances and the more successes and failures of anticipated outcomes can be recorded. Also, the larger the sample size, the more confidence we can have in the cause-effect being observed occurring. But, of course, we cannot take in every instance and every result within the time frame of “forever”, so statistics can only give us a limited analysis with just enough confidence to make plans on, with the caveat of “no guarantees”. As a creature that feels it must plan for the future, that’s the best we can settle for since all we can do is perceive but cannot directly influence our future.
It might surprise us, but human beings were already statisticians since we settled our earliest agriculturally dependent civilizations. Our most ancient monuments charted the movement of the astrological bodies within our galactic neighbourhood to determine the optimal times to plant, cultivate, harvest crops simply because following the same patterns around the year resulted in the best yields, barring the occasional disaster due to unforeseen events like weather, pests, or disease. But other than that, if the survivors stuck to the programme, most years there would at least be a satisfactory harvest.
Today, we chart everything, from stock market performance to housing and consumer prices. When we make plans at national and international levels, business decisions and even which toothpaste to buy (9 in 10 dental professionals recommend Crest), we rely on statistics to inform us of our most promising options and decide accordingly. We also decide based on factors like gut feel, or advice from trusted peer advisors, or inside information (illegal), but again, these decisions are still rooted in the confidence we have in our information source.
Of course, statistics have failed us before, sometimes spectacularly. Investment bubbles are created when people see opportunities in rapidly rising prices of certain products and jump on the bandwagon. They put their money on a product with already inflated prices hoping to sell it at an even higher price to the next sucker. If they get in on the trend and sell early, they’ll kick themselves for not waiting to sell later when the prices have risen even higher. But worse is when they get in too late and the trend is over. They are the ones left holding a very expensive baby and can’t unload without sustaining significant losses. People have lost their heads, and subsequently their life-savings ‘investing’ in hot items like tulips, comics, toys, collectibles, and at one point, even real estate (such as in Singapore before the authorities implemented ‘cooling off ‘ measures to keep housing prices from escalating beyond affordability for the average worker).
Statistics do not pretend to be infallible in predicting outcomes, yet we rely heavily on the analysis they provide when we plan for the future. At least there is a method behind the statistics that we can trust – a foundation of frequency that makes the patterns and trends sufficiently believable. That’s more assuring, anyway, than a pile of steaming entrails, a layer of leftover tea leaves, and a belief in a magic we must bribe to control (hopefully).
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Inspired by Singapore-Cambridge GCE ‘A’ Level H1 General Paper (Paper 1) 2020 Question #1