Learning the Basics: Three Industries That Use Stats

 

Most students know that they’ll never use the Pythagorean theorem in daily life. In fact, some may forget the basic formula before graduating from university. Still, having a background in mathematics can improve life in countless ways— especially now that data can do anything. 

Stats, in particular, are a way to interpret data by creating a formula that’s based on observation. Today, professionals use this type of information to make our everyday lives easier, from predicting the weather to evaluating business markets to forecasting a winning horse at the racetracks.

Those who don’t immediately see complicated equations when imagining stats are likely thinking of punting or gaming. In the latter example, stats have been used to gain an edge in games like blackjack and roulette.

For example, whether playing online or in-person, understanding the mathematical probability behind a roulette table often makes a difference; stats-based players sometimes use strategy when wagering in the inside and outside sections, as well as with ‘column’ and ‘dozen bets’.

Still, unless involved in meteorology, gaming, or betting, is there a clear reason for interacting with stats in our daily lives? In actuality, understanding a bit about hard numbers can improve our lives in the tangible ways listed below.

Review Aggregation

The last ten years have seen a boom in online goods and services; in fact, up to 75% of people do their shopping online today. Still, shopping online is a tricky business. Not all descriptions are honest, while a delay in delivery can spell disaster for orders on a deadline. 

Many peruse the reviews section before hitting ‘buy’, sometimes consulting the same review sites repeatedly to get a well-rounded breakdown of a product. In this example, stats play an important role in highlighting how good or bad the products are according to popular reviews.

If an item on Amazon receives four out of five stars from 500 reviewers, it’s safe to assume that it holds true to name. In fact, stats are so significant to review sites that there are algorithms that review sites themselves. Currently, Google Review is the most popular reviewer of reviews.

Social Media

Social media has become such a significant part of our lives that it’s almost considered essential. Aside from interacting with friends and family, many also use their social media platforms to help market themselves or even launch a small business. 

Unsurprisingly, stats have become a huge part of social media platforms. For example, the activity section on Instagram allows users to view their average spending on the platform. This is done by calculating the mean of the duration spent weekly. Other features allow users to check which social media platform they are more likely to frequent and for how long. 

Stats are even more important for businesses that rely on advertising via Facebook, Instagram, and TikTok. When it comes growing a social media account, stats are the basis on which CPC (cost per click) and other advertising prices are decided. 

Viewed in this light, stats allow social media users to analyze which posts get the most engagement, at what time, and how well they perform over time. The more a user understands stats, the more they’re able to optimize their accounts.

Wall Street

Stock market professionals work closely with stats every day to perform research on new markets, as well as to evaluate potential investments. In other words, they study hard financial data to decide if a profitable outcome is likely. 

Compared to review sites and social media, not many people will interact with stocks. In fact, many hire fiduciaries to turn their money into more money—without ever glancing at a ticker. However, this is slowly changing with the advent of cryptocurrency. 

More individuals are taking their investments into their own hands. In the past, the stock market only mattered to consumers when it crashed; today, some are using stats to leverage stocks. A good example is the saving of GameStop, which challenged widely-held beliefs about the average consumer’s power to affect the New York Stock Exchange.