Amazing Applications of Probability and Statistics

Reasoning based on probability and statistics gives modern societies the ability to cope with uncertainty.
It has astonishing power to improve decision-making accuracy and test new ideas. Within probability
and statistics there are certain amazing applications which stand out for their profound or unexpected
results. This page is aimed especially at AP Statistics students and  explores many of these amazing
applications.

The Probability of Penalizing the Innocent Due to Bad Test Results

Tests used for detecting things like drug abuse, intoxication, disease, genetic and birth defects, etc. often
lead to life changing situations including job termination, incarceration, surgery, and abortion. We like to
think these tests are accurate, yet, horror stories seem to abound. This article explores why a good test
can give bad results.

(AP Statistics Topics: probability)

How to Set Up Small Groups for Decision Making

Everyone believes in teamwork. Yet, anyone who has attended a meeting probably feels that a camel  is
indeed a horse designed by a committee. Probability and statistics can shed a great deal of light on how
to set up decision making groups with real horsepower. 

(AP Statistics Topics: probability, combinations or binomial coefficient)

Simpsons's Paradox - When Big Data Sets Go Bad

It's a well accepted rule of thumb that the larger the data set, the more reliable the conclusions.
Simpson' paradox, however, slams a hammer on the rule and the result is a good deal worse than a sore
thumb. 

(AP Statistics Topics: data analysis)

Benford's Law Part 1 - How to Spot Fraud

Everyone knows that our number system uses the digits 1 through 9 and that the odds of randomly
obtaining any one of them as the first digit in a number is 1/9.  These odds work well for data faked by
embezzlers but with real data the odds are considerably different. 

(AP Statistics Topics: random numbers)

 

Benford's Law Part 2 - The 80/20 Rule or Pareto Principle

Is the large wealth difference between rich and poor a result of capitalistic greed or could it be a
naturally occurring process as suggested in 1906 by the Italian economist Vilfredo Pareto. Benford's law
can be extended to this and other questions about ranked data. 

(AP Statistics Topics: explains why income distributions tend to be skewed to the high side or skewed
right)