New Books in Economics

Allen B. Downey, "Probably Overthinking It: How to Use Data to Answer Questions, Avoid Statistical Traps, and Make Better Decisions" (U Chicago Press, 2023)

Oct 10, 2025
Allen B. Downey, a principal data scientist and author, delves into the importance of statistical thinking and its real-world applications. He uncovers the friendship paradox, highlighting how we often perceive ourselves as having fewer friends than our peers. Downey addresses sampling bias with concerning examples, such as inflated recidivism rates. He also critiques the 10,000-hour rule for expertise and explains how misinterpreting data has led to misleading policies. Overall, he emphasizes the need for better data literacy in society.
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INSIGHT

Why Top Performers Are Far From Average

  • Many human traits follow log-normal distributions because multiplicative growth dominates over additive effects.
  • Log-normal tails explain why top performers (GOATs) are far above the average.
ADVICE

Use Significance–Persistence–Contingency For Career Choice

  • Evaluate career choices by significance, persistence, and contingency to estimate real impact.
  • Favor roles where your contribution matters, lasts, and is uniquely needed.
INSIGHT

Surviving Longer Often Predicts Longer Future Survival

  • Survival expectations can increase with observed survival because longevity signals lower risk or acquired skill.
  • NBUE (new better than used) doesn't hold for many human-risk cases like experienced riders or some cancers.
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