ProbabilisticIlliteracy

big data

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As I write this towards the conclusion of the US presidential election [1], there's a side debate that's appeared about the forecasts produced by Nate Silver. Many Republicans claim he's a shill for the democrats and his forecast of an 85% chance of an Obama win is bogus [2]. Part of me wishes I knew more innumerate Republicans that I could make side-bets with. Perhaps a better wish would be that the polls were the other way around as I have more Democratic-leaning friends. In reality either way I wouldn't gain too much as most people I know are numerate. Sadly this isn't true in general - this side-show is an illustration of the deep illiteracy most people have for probability, which has some important ramifications for society in general and software development in particular.

As I've been reading around this, it's not hard to find evidence of probabilistic illiteracy:

This side-debate has caught my interest because it taps many of what I see as fundamental problems people have with understanding probabilities and how to use them properly. To begin with there's the matter of certainty - people want to hear a binary answer rather than a probabilistic one. We see this, of course, in project planning where people want firm numbers rather than ranges and probability estimates for various outcomes. That difference between 85% and 100% can lead to some serious errors. I've developed a strong distrust of certainty, to the point that the more certain someone seems to be, the less I'm inclined to believe them. [5]

One aspect of this dispute is how you should use the poll information to make forecasts. If I head over to RealClearPolitics today, I see the election as a "toss-up", because a critical 11 states are marked as "toss-ups" in their analysis. Silver says that this conclusion is profoundly wrong. RCP's current poll average shows a 3.9% average poll lead for Obama in Ohio. Silver argues that when you average these multiple polls, the margin of error due to statistical sampling is about 1.5% - so if the polls are accurate Obama will win in Ohio (and you certainly can't call Ohio a toss-up, which implies 50% odds).

There are many reasons why people are implying this race has tighter probabilities than Silver does. Some are reasonable, such as disagreements about the model Silver uses for his forecast. Some are less reasonable: people are afraid of being seen to be wrong, they are indulging in partisan cheerleading [6], or they want make the race seem more exciting in order to gain eyeballs.

One argument is that this inappropriate use of "toss-up" is a consequence of probabilistic illiteracy. Since people don't understand what 85% means, then we'll call it a toss-up. As there's plenty of empirical evidence for this confusion, I have some sympathy for this argument.

But the real issue here is the underlying probabilistic illiteracy. Increasingly we are faced with a world where understanding probabilities matters. Understanding how probability works is a vital underpinning to making sense of statistics - and statistics is a key tool to understanding how to make sense of much of the data that is now available to us. This can make global sense (much of the debate about climate change is based on statistics) and but also matters in more local circumstances.

I'm of the opinion that we are seeing an important shift in the role that data can play in our lives. For software developers, this means that more of our work is going to be about making sense of this deluge of data. An important part of this is helping people to see the difference between signal and noise - which is going to require a better understanding of the probability and statistics required to separate the two. As software professionals, we need to take a lead in this so we can fulfill our duty to avoid distorting information, we also need to educate consumers of our data so that they can better interpret it. [7]


Further Reading

Notes

1: I made a deliberate point of writing this before the election. My point being that the result doesn't affect the issues I'm talking about here.

2: This is from the 538 blog on Sunday November 4th. The forecast changes regularly as he re-runs his model with recent data. Other references to published forecasts also refer to that same day, when I first drafted this article.

3: That is, of course, a 6-sided die. I have to say this as I'm sure this article is read by many people who, like myself, are familiar with more esoteric dice. Silver also had another probabilist analogy, saying it was like an NFL team being ahead by a field goal with three minutes left to play. (I'll leave that one in for the jocks in the audience.)

4: I can't be bothered to figure out how many elections you'd need, but know enough to know that you can do this with the right statistical techniques - and that the answer only provides a probabilistic indication of confidence.

5: And yes, that includes myself.

6: Many Republicans claim that Silver is only publishing the figures he gets because he is personally biased in favor of the Democrats. Personal bias always affects peoples' thinking, but there is an important difference between those who embrace their biases and those who strive to be objective. Silver has talked a lot about his model and how it works (although sadly it isn't open-source). There's no indication in his discussion of a conscious bias, indeed his odds give a higher chance to Romney than similar analyses While absolute objectivity is impossible, if you make the effort it is possible to get closer to objectivity than just wallowing in your prejudices.

7: This may be one benefit of this controversy - more attention paid to these techniques, so that more people learn how they work and how to interpret them.

8: One counter that I've seen to all these poll-based models is that of Bickers and Berry, which predicted a Romney victory. They don't use polls, but base their model on economic fundamentals. Their prediction jives well with my instinct - I confidently predicted that Obama would be a one-term president from the day he was elected. This prediction wasn't due to anything he might do, but just because he was elected too soon in the economic cycle for the economy to improve enough before 2012 for him to have a chance of being re-elected. If he does get re-elected, contrary to Bickers and Berry, I would argue that this suggests the Republicans have badly misplayed a winning hand.