Base Rate, Revisited

Reading Dan Kahneman’s Thinking Fast and Slow, and I can tell very early in it’s going to be excellent.

The following Kahneman insight is an old saw of research on statistical intuition by now, but was revolutionary when he and Tversky came up with it in the early 70s. I thought I’d share it for those not familiar with it:

As you consider the next question, please assume that Steve was selected at random from a representative sample:

An individual has been described by a neighbor as follows: “Steve is very shy and withdrawn, invariably helpful but with little interest in people or in the world of reality. A meek and tidy soul, he has a need for order and structure, and a passion for detail.”

Is Steve more likely to be a librarian or a farmer?

The resemblance of Steve’s personality to that of a stereotypical librarian strikes everyone immediately, but equally relevant statistical considerations are almost always ignored. Did it occur to you that there are more than 20 male farmers for each male librarian in the United States? Because there are so many more farmers, it is almost certain that more “meek and tidy” souls will be found on tractors than at library information desks. However, we found that participants in our experiments ignored the relevant statistical facts and relied exclusively on resemblance. We proposed that they used resemblance as a simplifying heuristic (roughly, a rule of thumb) to make a difficult judgment. The reliance on the heuristic caused predictable biases (systematic errors) in their predictions.

This seems a bit of a game when guessing occupations, but of course replace “Steve” with “an unknown medical condition” that resembles X, and the stakes become much more serious. Classic heart disease symptoms at 30 are far less likely to be heart disease than fuzzier, more ambiguous symptoms at age 70. One hopes one one’s doctor knows that — if they do, it’s through training and education, not untutored intuition.

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You can read their 1974 paper, “Judgment under Uncertainty: Heuristics and Biases”, where they first introduced these concepts, here.

The book, just out this year and covering Kahneman’s work and the more recent work of others in the field, is here.

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