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The Power of Statistical Data Analysis

By Yann, published on 07/03/2019 Blog > Academia > Data Science > Top Five Benefits of Using Statistics Everyday

Learning and using statistics can be challenging, especially as the amount of data we have only continues to skyrocket. In the last two years alone, 90% of the world’s data has been created, and this pace is showing no signs of slowing down. Quite the opposite: looking at the rate of data created each minute in the world, we find that 46,740 pictures are posted on Instagram and 16 million texts are sent. It’s no wonder that fields like big data analytics and data science have seen an unstoppable growth in the job market. This is why it is important to not only understand the different skill sets needed in data analysis but how we these skills in statistical analysis everyday to enrich our lives.

You can and do interpret statistics everyday Reporting on daily life, such as stocks and the weather, involve statistics

Inference and Probability in Daily Life

One of the major foundations of applied statistics can be found in probability; specifically, how probability utilizes Baye’s theory when forecasting events. If you’re really curious about the theoretical and computational aspect of Bayesian probability, you’ll just need a little bit of mathematics. However, the most important thing to take away from this theorem is what it emphasizes about the goal of statistics as a discipline: to find patterns and using these patterns to predict. These predictions are told by statistical data you hear in everyday life, predictions that are used to ameliorate daily life. Some examples are:

  • Weather reports
  • Financial markets
  • Pharmaceuticals

You don’t have to be a statistician or a researcher to analyze the weather reporting you hear every day. The framework of these kinds of reports are formed by hypothesis testing, statistical software, and of course many datasets. Statistical inference is used in this particular way in order to find patterns on weather data from the previous years, analyze this data, and use statistical methods to inform decision making.

Whether you know it or not, deciding your outfit choices every day mimic statisticians and their methodology in creating weather reports. Individuals, without looking at these reports, still use the power of prediction to estimate what the weather will be like today based on the weather yesterday.

Statistics and mathematical analytics is also used to analyze the financial markets around the world. In order to decide whether to invest in certain stocks, individuals utilize business statistics and accounting in order to analyze and make use of financial data.

This is used by large organizations and governments as well, using the power of estimation in statistics to make decisions on how to invest. Many branches of the economy same method is also applied to understanding unemployment statistics, census statistics across all demographics, and government statistics.

Next time you purchase over-the-counter medicine or receive prescribed medicine, remember that pharmaceuticals also benefit from quantitative data analysis. There are a variety of statistical methods that are applied towards trials for new drugs, including conducting surveys, sampling populations, and forming hypotheses.

This makes up an important branch of statistics, bio-statistics, which analyze the data from these trials to be able to investigate their effects. Decision making is especially powerful in terms of deciding whether or not new medicine should be brought to the public.

Learn About Your Economy In-Depth

If you listen to or watch the news daily, or have a favourite journal you turn to to get your information, chances are you read about statistics daily. This is because of one of the most important cross-disciplinary subjects involving statistics: econometrics. This mix of economics and statistics strives to use economic data in modelling future economic policy decisions in governments and banks.

At the core of econometrics is economic data, which is used daily in the news and can range from agricultural and census data to a country’s budget information. These measurements of growth include variables such as income statements, dietary consumption, tax information, graduation rates – all utilized as a sort of statistical consulting that predicts what the economic future will look like.

The importance in understanding the basics in econometrics is that it has deep social ramifications. In the UK, for example, people use econometrics when making decisions on this years budget for government spending.

Preparing for financial downturns is vital Forecasting political and economic trends is important

Another way you can see econometrics at work is looking at how certain government associations decide the policies on health, using data such as weight, income and diet in order to help make decisions regarding food products made or entering the UK. What this means is that statistical, economic analysis heavily effects political and fiscal decisions within the government and individuals.

Understanding how economics and statistics inform governments can, most importantly, help you understand your economic situation during financial crises. In the recent economic crisis, for example, it was critical for those affected to understand the policies issued by the government in response could either ameliorate or threaten your household.

How to Use Statistics to Improve Everyday Life

If you’ve ever used an app or device to help you manage your life, it is most likely that you are using statistics. The physical and financial benefits of using statistics can be found in the helpful analysis of your own personal data which, using apps like Runkeeper and Mint, make this analysis simple.

For example, many people will often want to make a lifestyle change and become more healthy, which becomes most apparent around New Years. However, studies have shown that having an application on your device that is geared towards an active lifestyle can help you keep resolutions related to your health. This means that, using your own data, you can track your progression on helpful apps like running, yoga, and walking apps that will help you attain your goals.

This also applies to people striving for a healthier lifestyle. Healthy eating apps, like apps that provide you with a plethora of wholesome recipes, have exploded. These apps don’t just include meal plans and healthy recipe guides, but also apps that keep track of dietary information in order to help you loose, gain or maintain a healthy weight and lifestyle. Utilizing statistics in this way shows how decision making based on own personal data can ameliorate physical and mental health.

Applications can improve both you health and analytical skills Analytical apps can help you achieve your goals

Budgeting apps have also proved extremely useful when trying to make an important change. These apps utilize individuals’ financial and bank information, keep track of your expenses, and can help you analyze the patterns in your spending. This can be particularly handy when making decisions on what to spend during the month or year.

However, these kinds of analyses can be even more impactful when trying to identify unhealthy spending behaviour. For example, if your budgeting app lets you see that each month you are spending 20% of your income on shopping, and know that at the end of the month you never have money for food, you can make a decision based on this information in order to create healthier spending habits.

Have Fun Learning Statistics

Using statistics isn’t limited to being used for improving and individual’s own personal life – it can also help simply because it lets you understand the world around you. Statistics is being used more and more to inform business decisions, politics, and the people around you – understand the ways in which it does so can help you come to more informed decisions about society. It’s also incredibly fun to learn, especially when it comes to wacky statistics like the fact that the amount of alcohol consumed in the US in 2006 was enough to fill Wembley Stadium five times!

Statistics can also be wielded to shed new light on ideas you’ve already formed about other people, countries and societies. For example, many people are under the impression that people who don’t graduate and end up in destitute positions should carry the blame of their decisions.

However, after looking up why exactly people from poorer areas don’t graduate at the same rates as wealthier socio-economic regions, you will be able to challenge the ways in which you have formed your opinions. Statistics, in other words, can give you a peek at the bigger picture in situations you’d like to learn more about.

This captures the most important aspect of statistics, which is that learning about it and how it affects our lives leads to questioning the world around you in positive ways. Questioning the world around us will always lead to new knowledge gained and expand the ways in which we traditionally think.

It is important to remember that data mostly always goes through an interpreter – which can be anything from a data scientist, a data visualization, a report, a memo. Interpreters are always biased, whether that be for the company they work for, government, or their own personal biases. No matter how hard they interpreters try not to be, it is imperative to always take statistics with a grain of salt. After all, how many times have you made a decision based on the weather only to be caught, unprepared, in a rain that wasn’t predicted.

If you’re interested in learning more between the differences within statistics and data science, check out this guide!

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