Super Crunchers start with two convincing examples. Orley Ashenfelter decided to determine what reasons produce a great wine, and Bill James sought to separate key qualities of a great baseball player. The two men arrived at their conclusions not by walking in the winepresses or sitting in the baseball pitch, but by sitting in their offices analyzing data.
What person’s name was or the label on the wine bottle or the appearance of the player did not incline them. What mattered was only about the facts captured in the reams of data that were inserted into their computers and processed as trillions of binary digits or bits (Ayers 39). Both men outdid the traditional experts such that neither the wine nor the baseball industries could ignore them.
Ian Ayres confronts a vital apprehension all the way through his book that is shown by the two introductory examples, super crunchers versus traditional experts. He explores the conduct in which companies are using the statistics available to them to transform the way they interrelate with their clients.
Airlines and online booksellers are currently tracking customers and making conclusions based on individual choices. Casinos and auction sites are calculating one’s worth to decide how much cash they can get out from an individual (Ayers 45). The Internet is a significant issue here as surfing the internet and using debit cards does not permit us to buy incognito; we leave in our data, debris that is trolled constantly by companies with their best interest in mind.
Organizing all these in order has led to the formation of completely novel Companies called record aggregators. Choice Point was established in 1997, and makes over $1 billion annually in profits from packaging and sale of data.
Axciom is even superior, an organization with over twenty billion customer records about 850terabytes of raw data all from community census records, tax data, and business Information supplied by its clients (Ayers 44). Corporations are prepared to compensate substantially for such comprehensive information about consumer habits.
Presently so many companies are crunching to give consumers an edge. Some websites will provide the best sale for airline tickets and still calculate whether the cost will be fluctuating. Nowadays one can shop for the finest insurance rates and find out exactly what one should be paying for their next car. These datasets lean on using the regression methods similar to Orley’s wine value approach. They crunch the information to conclude the weight of fundamental factors implicated in home prices or insurance rates (Ayers 43).
This is applied to evidence-based medicine, with treatment centers now being able to search for symptoms to make a diagnosis of illnesses. In 2004, Don Berwick claimed that if hospitals implemented six changes in care, which he recognized as being avoidable mistakes, 100,000 lives could be saved in the next 18 months.
On June 14, 2006, the campaign announced a predictable 122, 342 deaths had been prevented. Don Berwick’s crusade highlights one more essential numerical technique central to the super crunching revolution, the arbitrary trial. Regression techniques date back to James Galton in 1877. The randomized test was not introduced until1925 by Ronald Fisher, the father of contemporary statistics (Ayers 47).
For example, you simply randomly assign one set of sick people to be bled by leeches and the other faction to act as a control. The unpredictability of the assignments is what controls all other differences between the two groups, allowing you to measure the effect of the leeches. It is important to note that we are able to measure an effect with no prior reason why that effect happened.
Analyses of Super Crunchers. Ian Ayers is the founder of the new statistical movement, which has transformed the place of mathematical analysis in the society. He has done this through some of the analyses, which he has done on various issues in the society. ”
We are in a significant moment of horse-versus-locomotive competition,” Ayres writes, “where spontaneous and experimental know-how is losing out time to digit crunching”(Ayers 47). Wal-Mart and Google, for example, have developed into giants principally by spinning data into earnings. Ayres himself is one of the giants. He has done an interesting research on the relationship between gender and the total sales, which found out why women sell more than men do.
Irrespective of his informative findings, his work continues to face critics from various quarters who still believe that intuition is always the best method of making judgment. For one fixation, Ayres comments, data intimidate the “informational monopoly” of experts in a variety of fields (Ayers 44). Nevertheless, even to lots of people devoid of a stake, relying on hard numbers rather than human intuition seems dismal.
Ayres tries to prevail over the cynicism by presentation on how effortlessly instinct can go wide of the mark. He does this by conducting a survey using questionnaires, which ask individuals what they think Martin Luther junior was when he died. Some of the respondents answer back with a lot of certainty even though they are giving the wrong answers. He indicates that most of the people would rather rely on instinct rather than rely on the numbers.
He argues that it is because human beings are lazy and they rarely want to disturb their mind, which is why most of the people would rather listen to their instincts when doing some calculations. He explains that this is the reason why some of the major companies are gaining an edge in the marketplace by using numbers and data to manipulate the marketplace.
He shows how the Wisdom of crowd allows groups to locate things that are best for individuals. Amazon easily tells the kind of books regularly bought by people and the reason why people prefer them. This kind of data mining from group behavior to form personal recommendations has been more successful than regular book or movie (Ayers 40).
He further shows how easy it is for informed customers to get bargains from various companies by analyzing which companies are offering the best product at a reasonable price. They can do this by analyzing data, which is passed over the internet every now and then. It is now possible to shop for a product at its minimum price. The customer who purchases products only after thorough crunching will certainly have an edge over a customer who will rely on intuition alone.
This book also shows the place of regression in statistics. Through regression, raw data is analyzed and used to predict the association of various variables. Many practitioners due to its high level of accuracy prefer this tool. This tool provides a straight-line graph best fitting the data. Two Canadians, Gordon and Guyatt developed evidence-based Medicine. They argue that facts and numbers should also back treatment, which indicate how the medicine in use has been of benefit to the patients.
The Super crunches have revolutionized the modern world into the information age. The author only reaffirms the fact that corporations as well as individuals who will have an edge over others are those who will be having information. That is to mean they should not rely on guesswork and assumptions but rather rely on well-done research. For a long period, humanity in general has relied on their intuition rather than research. However, one should depend on intuition as well. One has to rely on facts and data to make a sound decision.
Super crunchers are simply providing solutions to not only the world of economic and medicine but have also revolutionized politics. Nowadays firms like Gallup are very popular simply because they provide statistics on who will win and who is likely to lose an election. Anyone can ignore this at his or her own peril.
This simply shows that statistics long replaced instincts and no one in the world of business should solely rely on instincts. They do analysis of why people like a particular party and why they are going to vote for a particular candidate. This shows that numbers can be relied on when one is making a judgment especially when this judgment is going to have greater implications.
Companies nowadays have to do a lot of analysis before that place a new product or service in the market. They can no longer rely on the intuition that new is always good. Recent customers surveys have indicated otherwise and therefore the companies must be extra careful to have done an analysis of the kind of receptivity their product is going to receive before they invest billions to launch a new product.
What super crunching has done is to revolutionize the manner in which decisions are made. Sometime back, an expert opinion from a well knowledgeable person in a particular field was what was required to make a judgment. However, in the modern world the evidence talks more than the opinion and those who fail to rely on the evidence provided will certainly make erroneous judgment, which will soon or later drive them out of the market or success sooner than it was expected.
The opinion and evidence are two phenomenon which for sometime seemed synonymous until Ayers differentiated them. An opinion is an expression of one’s thoughts and feeling towards a particular subject or object. Evidence on the other hand is the truth, tangible information about a particular issue or object. Evidence can be proved whereas opinion cannot be proved.
Nevertheless, Ayres is not without critics who think that humanity could not have been wrong for spending many years without using statistics. They accuse him of being used by large corporations, which use statistics to gain and maintain customer credibility to champion the use of statistics as a representation of truth. Facts too cannot be accurate unless the sources of those facts are also accurate. However, those who want to stay irrelevant can only ignore the strong argument of Ayers.
Ayers, Ian, Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart. Massachusetts: Harvard University Press, 2002. Print.