Saturday, November 19, 2011

Why You Can't Get Rid of Statistics

I am a graduate student in the Integrated Marketing Communications program at Northwestern University. In the program, marketing is seen as the combination of art (branding, strategy) and science (data analysis). It’s not unusual to have students haunted by analytical classes and swear to find a job from the art side and never ever touch statistics again. While I agree that stats is one of the most polarized classes in the program, I wish them good luck in achieving the goal of “no stats in the rest of my life”. Here is why.
This morning, I was flying to Seattle with a friend for a wedding. We forgot to check-in online, and there was only one seat left when we arrived because the plane was oversold by one seat. One of us had to stand by and hope that another passenger didn’t show up.
One might wonder why the airlines could oversell despite the risk that someone with a reservation would not be able to get on the plane. With a little help from Google on relevant figures, the situation could be cooked down to a simple stats problem: From past experience, the airline no-show rate is 13%. With 138 seats and one oversold, the probability that at least one passenger won’t show up is -- almost 100%. In other words, the air company takes almost no risk in doing so.
               Stats is not nerdy entertainment that makes life miserable, but a powerful tool to understand the past, predict the future, and therefore solve problems. It’s rooted in life, and that’s why you can’t get rid of it. Ever.

Mina Zhou, Northwestern Medill IMC2011, Twitter: @Mina_Zhou9

1 comment:

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