Read Harvard management update article \"The Use and Misuse of Statistics.\" art

Question

Read Harvard management update article "The Use and Misuse of Statistics." article reprint no. U0603C,( CAN BE FOUND ONLINE)

Based on the article answer the following 6 questions:

1. Why would a statistician say “The actual statistical calculations represent only 5% of the manager’s work?”

2. What does the author mean that managers need to “Be clear about what you want to discover?”

3. Why is it important to be careful about causality?

4. Why can’t you prove anything 100% with statistics?

5. Explain the difference between statistical and practical significance.

6. With all the limitations discussed in the article, why do we do statistics?

Explanation / Answer

Solution:

Dear Student, Please post one question at a time.

Question 4: Why can’t you prove anything 100% with statistics?

Answer:

Statistics can't be used in itself to prove things. It can be merely used to support other rational thinkings and evidence.

A statistical proof doesn't necesarily guarantee the truth as the statistics can be manipulated and / or can be subjected to a lot of bias from various sources.

For e.g. statistically there may exist a relationship between the GDP of a country and the average temperature in a year in that country. However, this is of no significance, unless we are able to provide causality to the effect. This is also the reason between the difference of statistical and practical significance.

Hence, nothing can be proved 100% with the statistics.

Infact, there are many cases where statistics can be misleading.

Statistics still remain a powerful tool to prove (or disprove) a certain statement provided there exists a causality to the effect. However, it should not be used by itself standalone.

Hope this helps.

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