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An Introduction to Critical Thinking and Creativity - always yours

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152 STATISTICS AND PROBABILITY<br />

On the face of it, the picture seems <strong>to</strong> indicate that there was a sudden surge<br />

in cake sales. But this is actually an illusion because the horizontal time axis is<br />

not evenly scaled. The period 2002 <strong>to</strong> 2007 is compressed compared <strong>to</strong> the other<br />

periods, giving the erroneous impression that the rate of growth has abruptly increased<br />

when in fact the growth in sales might have been rather steady.<br />

» (D<br />

1980: 9,947 calls 2000: 50,105 calls<br />

The diagram above shows that the number of emergency calls received by a<br />

hospital has increased about fivefold between 1980 <strong>and</strong> 2000. This is represented<br />

pic<strong>to</strong>rially by the fact that the diagram on the right is five times taller than the left<br />

one. But the problem is that subjectively, our perception of the relative difference<br />

depends on the area instead of just the height. Since the diagram on the right is<br />

also five times wider, its area is actually 5 x 5 = 25 times larger than the diagram<br />

on the left. The result is that looking at such the diagram, the readers have the<br />

impression that the increase is a lot more than just five times.<br />

17.4 PROBABILITY<br />

It is no exaggeration <strong>to</strong> say that probability is the very guide <strong>to</strong> life. Life is full<br />

of uncertainty, but we have <strong>to</strong> plan ahead based on assumptions about what is<br />

likely or unlikely <strong>to</strong> happen. In all kinds of professions, assessments of probability<br />

<strong>and</strong> risks are of critical importance—forecasting sales, calculating insurance<br />

needs <strong>and</strong> premiums, determining safety st<strong>and</strong>ards in engineering, <strong>and</strong> so on.<br />

In this section, we are not going <strong>to</strong> discuss the mathematics of probability. If<br />

you are interested, there are many textbooks <strong>and</strong> websites you can consult (including<br />

the companion website). Instead we shall focus on some of the main reasoning<br />

mistakes about probability.<br />

17.4.1 Gambler's fallacy<br />

The gambler's fallacy is the mistaken belief that the probability of an event might<br />

increase or decrease depending on the pattern of its recent occurrences, even<br />

though these events are independent of each other. The name comes from the

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