Sunday, January 30, 2011

Super Crunchers - Ian Ayres

Data based decision making is not new.  It had been there for ages. Why has it come to prominence again under various names like Number crunching,  data crunching or as the title here says super crunching.  The only difference is now the ability to do this in a jiffy, in split seconds and perform action ( many automatically) based on the results. With the advancement of IT and super computing, it has become more widely used not only by researchers, but by business as well.  So much is the importance, that some of the largest IT Services companies offering services around the business of analytics.

However, this book revolve around what is known to us already. Looking at statistical regression and related examples from various field and some of the front runners, who relied on the data based decision making, in place of the common wisdom and intuition.  Typical to many of them,  Ian Ayres too, starts with the wine industry ( why is the wine industry so popular with number crunching ? The book titles Quants, was also begun on similar lines, if I remember correctly) and the typical exchange of words by the traditionalists and the 'super crunchers', He then goes through various segments of industry such as  medicine, legal ( predicting the judgement based on previous results and data), movies( the box office collection even before the first frame is shot) , and social ( government projects, dating and marriage services, the individuals characteristics and preferences), explaining the merits over and over again.

One of the key ingredient of regression analysis, is the data itself. However, we could use the same methodology in arriving at business decision by selective experiments and data collection using randomization trials and or with control group experiments.  With the advancement in technology and the availability of large data set, helps us run the experiments with multiple variables with various controls as is needed.

The book is an easy fiction like read, with innumerable case studies or examples, each driving us to the same conclusion that the data cant lie. Having said that, it traces the obvious and to me there are no new insights making it a pretty ordinary read.

He conclude the book with a line, which captures this book in a nutshell: Super Crunching is not substitute for intuition, but a compliment. Our intuition, our experiences, and,yes,statistics should work together to produce better choices.

Super Crunchers : How anything can be predicted ( 2007)

Ian Ayres

John Murray ( Publishers)

260 Pages
Further read: Emerging Trends

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