Monday, December 29, 2008

Do you always believe other people's claim?

We often have to make decisions based on what other people state or claim. However, how do you know if their statement or claim is a solid and valid argument? For example, we all enjoy going out for dinner with family and friends. When you pick up and look at the restaurant's menu, you notice there is a significant automatic charge for service that will be included in your bill. You question this charge with the owner of the restaurant, who tells you the charge is due to the trend in which large parties often pay less in tips than small parties. Would you take as a fact what the owner claimed?

Mathematics is a useful tool to prove or disprove someone's claim. The excerpts clipped to this post came from an interesting article from Plus Magazine web site (i.e. Issue 49), which explains how Statistics is used to make sense of all the information we receive from different sources. I encourage you to read the article and become aware how mathematics can help you make informed decisions.
clipped from

We live in a world full of information and it's a statistician's job to
make sense of it. This article explores ways of analysing data and shows how
they can be applied to anything from investigating diners' tipping behaviour to
understanding climate change and genetics.

Have you recently sat down in a lovely restaurant, picked up the menu, and read
"12.5% discretionary service charge will be added to your bill"? In the UK this
is now a common occurrence. In the USA the extra service charge is often made
dependent on the size of your party: if you're more than six people, the charge
will be added automatically. So what is the connection between party size and
service charge?
One reason for this fairly recent change in procedures is that restaurant owners
and workers collect data on their diners, and it has been discovered that larger
dining parties tend to tip less.
The model says that the tip rate decreases by a little under 1% for each
additional diner in the party.
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