Ayres, I. (2007). Super Crunchers: Why thinking-by-numbers is the new way to be smart. New York: Bantam. Introduction, p. 1-18; pop culture and data
Rise of the Super Crunchers, Ian Ayres, 2007
starts out talking about investing in wines, antipating what it will be worth in the future
How much pleasure am I going to get by delaying my gratification?'
Orley Ashenfelter, economist at Princeton used statistics to determine the characteristics of vintage associated with auction prices
low levels of harvest rain and high average summer temps produce the greatest wines--> Wine quality = 12.145 + 0.00117 winter rainfall + 0.0614 average growing season temperature - 0.00386 harvest rainfall
Questions of accuracy versus probability
he even showed that Parker’s initial ratings were biased upward
1989 as the vintage of the century; 1990s even better
“A convenient truth for wine lovers is that it’s been a great time to grow truly supple Bordeaux.” (p. 5)
it isn’t always popular to be right; the stats demystified the wine industry, which had an informational monopoly on the quality of wine
Bill James did the same thing for baseball
his thesis: data-based analysis is superior to observational expertise
Runs Created = (Hits + Walks) x Total Bases(At Bats + Walks)
In both contexts, people are trying to predict the market value of untested and immature products….the central dispute is whether to rely on observational expertise or quantitative data. p. 8
hedge funds have super crunchers
interesting that this book is from 2007, just before the crash!
MT: databases are designed by people who think certain data should be kept in certain ways; one is still employing intuition and experience when analyzing data
the fear “that sophisticated social engineering, at the behest of big government and big corporations, was about to take over the world has been suddenly resurrected for a new generation.” p. 13
positive externalities of LoJack