The Stats Ninja

Why Does Variation Matter?

Here’s the thing — there’s no need to study/use data when everything is identical. It’s the differences in everything around us that creates this need to use, understand, and communicate data. Our minds like patterns, but a distinction between natural and meaningful variation is not intuitive – yet it is important.

What’s So Complicated About Variation?

Let’s set the stage to digest the concept of variation by identifying why it’s not an innate concept. At young ages, kids are taught to look for patterns, describe patterns, predict the next value in a pattern. They are also asked, “which one of these is not like the other?” But this type of thinking generally isn’t cultivated or expanded.

How to Decipher False Positives (and Negatives) with Bayes’ Theorem?

Note: Before proceeding, a great recap of probability concepts can be found here, written by Paul Rossman.

Why did I do this?

I truly believe the crux of using AI is going to be whether we rigorously test our result vs. accept it as truth. Those who always accept the AI output as truth will find themselves slowly losing their ability to critically think. Those who test and refine will find themselves evolving to new ways of thinking.

Does it even matter? Glad you asked.?

Answer: It absolutely matters. Because when you take an average of an averaged calculation, you ignore the number of rows (in this case, orders) that were used to calculate that average. Meaning, the average of an average assumes each region had the same number of orders because it adds up all of the averages and divides by the number of regions.