Category: 3 – SHELF it (All Categories are 1 – Read ASAP!, 2 – BUY it!, 3 – SHELF it, 4 – SOMEDAY it)
Comments: This is a Statistics textbook. So, it definitely isn’t for everyone. However, if you are interested in Statistics, it is an awesome book. Lays out concepts with a ton of clarity.
Top 3 Learnings:
1. Let’s say you are tossing a coin.
The law of averages says nothing about an increased likelihood of a tail after 4 rows of heads. Instead, it says that – as you keep increasing the number of tosses, the chance error as a percentage of tosses keeps going down.
2. Regressions ONLY deal with associations or correlations. An increase in x is associated with an increase in y.
3. A test of significance gets at the question of whether an observed difference is real (alternative hypothesis) or just a chance variation (null hypothesis). The observed significance level is the chance of getting a test statistic as extreme or more extreme than the observed one. The chance is computed on the basis that the null hypothesis is right. Small values of p are evidence against the null hypothesis – i.e. the observed difference is real.