Guest post from Charith Acharya, Product Marketing Manager, IBM SPSS Statistics.
My first contact with statistics was through the Market Research module in B School. While there is a good chance that a significant majority of the population have never actively used a statistical method, I am sure that a good number of that population, regardless of age, have at least heard of the word statistics. The media have played a major role in increasing awareness, but the main driver for this change is the ever-increasing quest for a better life. Each of us wants to live happy, healthy lives -- and every single decision that we make is in pursuit of this goal. As a result, we tend to either consume or produce goods and services that would improve our life, or someone else’s.
The question now is, “How do we know what’s good and will make our lives better?” It’s a question that could be asked at any point of time, in any sphere of life. Let me start with my own life.
I wake up in the morning and reach out for the toothpaste. Placing my trust in the company that produces it, I believe that they have a well-thought-out statistical quality control process that guarantees that I am maintaining my oral hygiene without harming myself with an overdose of the chemicals used to manufacture it. I then have whole wheat bread with low fat- cholesterol free butter and skimmed milk for breakfast, foods that are statistically proven to be better for health, compared to some of the choices that we made a couple of years back.
Within forty-five minutes of starting my day, I have inadvertently allowed statistics to touch my life, several times over!
One of my favorite examples of using the correlation concept in statistics is based on this peddler right outside a village bar in Southern India. A man with a push-cart sells jewelry for ladies and toys for kids. I was amused at first but his brisk business convinced me that he was in the right place. I later learned from him that men would buy something for their wives and kids either out of happiness, guilt or to just to get into the house. He claimed that, over the past three years, he had figured out the right toys and jewelry to display to customers based on the season, the price and type of the liquor they ordered and even the type of Bollywood film that was currently running in the nearby theater!
On a more serious note, statistical models have been used for important decisions that could impact the lives of many people.
From creating models to assess cardiac risk in the Intensive Care Units of hospitals to creating models to check the outbreak of pandemic diseases in real time, statistics is an indispensable tool in today’s medical industry.
Statistical models have also been widely used in the Defense sector in maintaining and predicting critical equipment failure that could otherwise have serious ramifications on a nation’s security.
Statistical models have proven to be very useful in the Financial Industry as well in reducing late loan payments from borrowers and accelerating the lending process to the right customers.
Yet another example of usage of Statistical models is in the Energy and Utilities Industry where municipal bodies are able to predict water and electricity consumption and thus save the city thousands of dollars.
There is one incident though, that made me think of the myriad ways of using statistics. An advertisement for an antacid screamed that eight out of ten people preferred this product. The message would have convinced me if I had not seen the fine print below, which stated that eight out of ten people preferred the taste of this new product vis-à-vis another product. Amused, I drove on.
A new release of IBM SPSS Statistics will be available on the 13th of August 2013. Find more information here.