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from Tuesday, May 20, 2008

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Paradox of the false positive
alanocu
by alanocu  5-20-2008    3
 "Here's how that works: imagine that you've got a disease that strikes one in a million people, and a test for the disease that's 99% accurate. You administer the test to a million people, and it will be positive for around 10,000 of them – because for every hundred people, it will be wrong once (that's what 99% accurate means). Yet, statistically, we know that there's only one infected person in the entire sample. That means that your "99% accurate" test is wrong 9,999 times out of 10,000!" "If we were good at understanding statistics, then here's what would happen when you flew to Las Vegas. You'd step out of McCarran airport, stare down the Strip at all those glittering, palatial casinos and say to yourself, "Holy crap – think of all the suckers who must have lost everything to finance this place!" Instead, our foolish minds are filled with thoughts like, "Man, look at all the money in this town – I'm going to win big!" And another casino is built."

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