How Statistics Can be Misleading (Video)

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Analysing statistics and aggregated data is an essential skill to improve if you are heading to B-school for a Master’s or an MBA degree.

The popular B-school GMAT and GRE tests assess these skills not only through their quantitative sections, but also the Integrated Reasoning (GMAT), the Verbal (GMAT and GRE) and even the AWA Analysis of an Argument (GMAT and GRE) parts.

“How statistics can be misleading” – a TED Ed video lesson – demonstrates how critical thinking and attention to detail can bring into question statements seemingly soundly grounded in statistics. Finding flaws in argumentation by identifying misleading statements is an essential analytical and decision making skill. Learn how to do it with several examples in this video lesson. Mark Liddell – the author of the video lesson – claims:

Statistics are persuasive. So much so that people, organisations, and whole countries base some of their most important decisions on organised data. But any set of statistics can have something lurking inside that can turn the results completely upside down.

This video lesson investigates Simpson’s paradox in statistics. This phenomenon was first described in a technical paper back in 1951 by Edward H. Simpson. It is also known as the ‘Yule–Simpson effect’, ‘reversal paradox’ or ‘amalgamation paradox’.  Here is why.

This is a paradox in probability and statistics, in which a trend appears in different groups of data but disappears or reverses when these groups are combined. This result is often encountered in social-science and medical-science statistics, and is particularly confounding when frequency data is unduly given causal interpretations. The paradoxical elements disappear when causal relations are brought into consideration. Many statisticians believe that the mainstream public should be informed of the counter-intuitive results in statistics such as Simpson’s paradox.

Watch this video in order to train your critical thinking skills for better decision making in your everyday and professional life. The video will be particularly helpful if you are preparing for B-school admission tests such as the GMAT and GRE.

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