Everydata

The Misinformation Hidden in the Little Data You Consume Every Day

John H. Johnson

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781351861830
• Edition: 1
• Topic: Business
• Subtopic: Business generale
• Index: Business

While everyone is talking about "big data, " the truth is that understanding the "little data"--the stats that underlie newspaper headlines, stock reports, weather forecasts, and so on--is what helps you make smarter decisions at work, at home, and in every aspect of your life. The average person consumes approximately 30 gigabytes of data every single day, but has no idea how to interpret it correctly. EVERYDATA explains, through the eyes of an expert economist and statistician, how to decipher the small bytes of data we consume in a day. EVERYDATA is filled with countless examples of people misconstruing data--with results that range from merely frustrating to catastrophic: The space shuttle Challenger exploded in part because the engineers were reviewing a limited sample set. Millions of women avoid caffeine during pregnancy because they interpret correlation as causation. Attorneys faced a $1 billion jury verdict because of outlier data. Each chapter highlights one commonly misunderstood data concept, using both realworld and hypothetical examples from a wide range of topics, including business, politics, advertising, law, engineering, retail, parenting, and more. You'll find the answer to the question--"Now what?"--along with concrete ways you can use this information to immediately start making smarter decisions, today and every day.

1
Data, Data, Everywhere

An Introduction to Everydata

From the moment you open your eyes in the morning, you're surrounded by data. In fact, the average American consumes roughly 34 gigabytes of data every day, according to the "How Much Information?" program at the Global Information Industry Center (part of the University of California, San Diego).¹

Thirty-four gigabytes is a lot. One gigabyte—or GB, as it's commonly abbreviated—is just over 1 billion bytes (a byte is typically equal to one letter or number). If you printed out 34 GB worth of data, it would fill dozens of pickup trucks, said a source cited by the BBC.² And that's just from active sources of data at home like your TV, radio, computer, and phone—the 34 GB figure doesn't seem to include data that simply exists around us, or the information we get at work, which could easily double or triple this number.³

Let's take a minute and think about all the "everydata" you might encounter—and interpret—just in the first hour or two of your day:

• ■ You open your eyes and see your first data of the day—the glowing numbers on your alarm clock.
  Estimated data consumed: 9 bytes
• ■ You grab your smartphone. It's easy to scan a dozen e-mails, a few texts, some traffic alerts, and breaking news alerts before you even get out of bed.
  Estimated data consumed: 2.1 megabytes (1 megabyte = approximately 1 million bytes)
• ■ You walk into the bathroom, step on the scale, and see the proof that you shouldn't have had pizza last night.
  Estimated data consumed: 3 bytes
• ■ Can you get data from a toothbrush? Sure, if it's one of those electronic ones that vibrates every 30 seconds to remind you to move it around. That vibration is just another type of data.
  Estimated data consumed: 60 bytes
• ■ Ding! A calendar alert on your phone reminds you about a client meeting.
  Estimated data consumed: 43 bytes
• ■ Do you take a multivitamin? Fish oil? Make sure you read the label carefully so you understand all the data it contains. Medicine labels are full of very important data.
  Estimated data consumed: 2.0 megabytes
• ■ Your daughter needs you to sign her math test. How do you know you're seeing all the data? Are there other tests that your daughter doesn't show you? And what do the scores mean—do they correspond with her ability, or are they just capturing her participation or some other measure?
  Estimated data consumed: 46 kilobytes (1 kilobyte = approximately 1,000 bytes)
• ■ How do you get your news in the morning? People actually recall more information when they read a printed newspaper versus reading it online, according to a study from the University of Oregon.⁴ As you scan the headlines, you see
  • ➤ The latest poll numbers show 76 percent of Americans disapprove of Congress.
  • ➤ The Red Sox are in first place—winning their 15th game in a row and taking a 7-game lead.
  • ➤ The weather forecast shows a high of 70 degrees Fahrenheit and a low of 58.
  • ➤ A new study shows that drinking a glass of red wine every day will lower your chance of heart disease.
  • ➤ Budget numbers predict that the interest rates will be lowered again by the Federal Reserve.
    Estimated data consumed: 3.1 megabytes
• ■ You wonder what it will cost (in money and time) to refinance your house if interest rates drop. You put a note on an app on your smartphone (which automatically syncs with your computer) and e-mail your spouse.
  Estimated data consumed: 2.2 megabytes
• ■ Time to go to work. As you jump in your car, you're immediately greeted by a dashboard full of data. Is the oil light on or off? How hot or cold is your engine running? What about the tire pressure? Some data is shown via warning lights that are either on or off, some is conveyed with an analog dial, and other data is on a digital screen.
  Estimated data consumed: 63 bytes
• ■ Your gas tank is a quarter full. What exactly does that mean? And why can you still keep driving even when the gauge says empty? (See chapter 6 for the answer.)
  Estimated data consumed: 26 bytes
• ■ At one gas station, the price on the sign is four cents per gallon cheaper than across the street—but the gas station with the cheaper gas only takes cash. Is that four cents per gallon enough to influence your behavior?
  Estimated data consumed: 2.0 megabytes
• ■ Do you take public transportation to work or do you drive? If you're in Washington, D.C., you might use the express lanes on 1–495, which charge a "dynamic" toll.⁵ (In other words, data is collected and then prices are adjusted accordingly.) But are the toll adjustments following strict rules of supply and demand? Or is this just another example of an institution using hidden data to justify higher prices?
  Estimated data consumed: 44.0 megabytes
• ■ You stop at Starbucks for some coffee. Should you get the 16-ounce Grande or the 20-ounce Venti? You think about the extra cost (and the extra calories). You place your order, then read the label on each little package of Splenda, Sweet'N Low, and Equal; they're all covered with lists of nutrition facts and ingredients. (The real sugar and honey packs don't have nutritional facts on them, making it harder to compare them with their counterparts.)
  Estimated data consumed: 10.1 kilobytes

You're finally at the office, and it's time to get to work. From keeping up with the news to checking your e-mail, reviewing spreadsheets, negotiating contracts, looking at sales forecasts, making phone calls, and going to meetings, it's all data, all day long.

Bur even this list barely scratches the surface of explaining how data can affect our lives. Because mixed in with data about where to get gas and what to do about your kid's math grade, there's everydata that can influence how happy you'll be, how much money you'll make, and even how long you'll live. For example:

• ■ Where should you buy a house or rent an apartment? Should you pay more attention to school rankings, commute times, crime statistics, potential resale value, or some other data?
• ■ What happens if you have a great job offer on the table and you're trying to decide what to do? What data can you use to justify the salary and benefits you want? When you present your data to your potential new boss, how will she perceive that data?
• ■ How do you decide who to date, and possibly marry? Do you use an online dating service, which filters and interprets your data in order to find a compatible match? Which data is most important to you? Your partner's height? Where he went to college? How much money she makes?
• ■ What if your doctor tells you your blood sugar or cholesterol levels are too high? Is there a specific threshold at which the numbers are dangerous? Are the elevated numbers due to genetics, diet, or some combination of factors? Your doctor may want you to do daily blood tests and keep records of what you eat (more data for you and your doctor to analyze).

So what do you do with it all?

"We're rich in data," noted Time magazine, "but the returns are diminishing rapidly, because after a certain point the more information you have, the harder it becomes to extract meaning from it."⁶

Sound familiar? You're not alone.

"Little Data"

You've probably heard of "big data." It's basically data that's too big for people to process without the use of sophisticated software and computing capacity given its enormous volume.⁷ For example, United Parcel Service, Inc. (UPS) gathers 200 data points per vehicle (it has approximately 100,000 vehicles), using that data to save idling time and fuel, according to a Bloomberg Business article, which notes that "a reduction of 1 mile per day for every driver can save the company as much as $50 million a year in fuel, vehicle maintenance and time."⁸

Around the world, big data is being used to solve big problems. The Netherlands is using big data for water management.⁹ Food delivery companies use it to satisfy their customers' late-night munchies.¹⁰ IBM is using petabytes of data to identify possible cases of food contamination (1 petabyte = 1 million gigabytes).¹¹

Big data is sexy. It makes the headlines. Demand for some big-data-related jobs is increasing more than 80 percent each year, according to an article in Forbes.¹² Business school students "can't get enough of big data," says the Wall Street Journal, citing the fast-growing number of data-related programs.¹³

But, as you've seen already, it's the little data—the small bits and bytes of data that you're bombarded with in your everyday life—that often has a huge effect on your health, your wallet, your job, your relationships, and so much more, every single day From food labels to weather forecasts, your bank account to your doctor's office, everydata is all around you.

Unfortunately, people don't always believe the data, even when it's right in front of them.

"Facts don't necessarily have the power to change our minds," said an article in the Boston Globe. "In fact, quite the opposite."¹⁴ The article cited a University of Michigan study that found people who were misinformed often held fast to their beliefs; some even felt more strongly in their (false) beliefs when faced with facts. (Apparently, some people simply don't like to admit when they're wrong.)

Still, as the saying goes, the plural of anecdote is not data. Just because all your neighbors say it's the hottest summer ever doesn't mean it's true, for example.

"I think the biggest issue we all face is over-interpreting anecdotal evidence," said Emily Oster, an associate professor of economics at Brown University and the author of Expecting Better: Why the Conventional Pregnancy Wisdom Is Wrong—and What You Really Need to Know, when we asked her how people interpret data in their everyday lives.

"People are very drawn to wanting to learn from individual stories or experiences," she added. "It is difficult to force yourself to ignore these anecdotes—or, at a minimum, treat them as just one data point—and draw conclusions from data instead."

Anecdotes may be memorable. They may be persuasive. But it's important to pay attention to the facts.

A Little Context

Here's something else to keep in mind—in everyday life, you may be looking at data in context, or comparing it to the other data around you. Sometimes this context and additional data helps, other times it may be misleading.

Consider:

■ In the city of Hermosa Beach, California, the average estimated response time for the fire department was just over five minutes.¹⁵ Is that a good response time or not? In order to interpret the data, you may want to compare it to the city's response times in the past, response times from similar communities, and other data.

■ Authorities at George Bush International Airport in Houston were getting complaints about passengers' luggage taking too long to arrive. So they moved the baggage claim area farther away from the gates. Passengers then spent the time walking—not waiting—and complaints dropped, as people perceived the time to get their bags as being shorter.

■ There are differences in the way we consume and interpret data in different mediums. For example, do you feel that the Washington Post website is more accurate than the printed version of the newspaper, because it can be updated nearly instantly? Do you prefer reading a printed magazine because you can rip out interesting articles? Does a hardcover book feel more authoritative than a paperback, even though they're both printed?

As Seth Godin asked in a blog post, "What tastes better, a $30 bottle of wine that's the cheapest the restaurant offers... or the very same bottle at the restaurant next door, where it's the most expensive?"¹⁶ Context matters.

Then, ...