For first year university students studying commerce

For first year university students studying commerce

ESSA Writers
March 13, 2014

A brief word to all those first year university students studying Commerce: there’s something special about the first weeks of uni. It’s not the opportunity to meet new people and make new friends (though that’s obviously a good thing). Nor is it the chance to get involved in all kinds of different activities on and around campus (through broadening your horizons is a worthy pursuit). No, what makes the beginning of the year so great for those of you who are about to set foot in the field of business is that you would already have been enrolled in a compulsory unit studying statistics.

I understand if you’re less than convinced that this is such a good thing. For one thing, most Commerce degrees impart upon their students the value of choice, and yet you’re compelled to ponder the point of p-values and to ruminate on the ramifications of regression analysis. And after all, many of you probably aren’t interested in becoming statisticians. Even if you were, not many Commerce degrees offer specialisations in pure statistics (actuarial studies comes close, but let’s keep the discussion here to the realm of mere mortals and leave the mathematical masters to one side). So why does the idea of students being forced to focus on stats fill me with glee?

Statistics is not about the numbers. It’s about what you do with them. Or, perhaps more importantly, what you can and what you can’t do with them. It’s about knowing what to do with data and when you can do it. It is, in short, about using data to make better decisions – the best possible decisions – in the face of limited or imperfect information and uncertainty. With the right tools, statistics can help you make better decisions in almost any context.

To demonstrate: what good would you be after an apocalypse? Friends and I, being voracious consumers of post-apocalyptic fiction who like to think of ourselves as practical and pragmatic planners, frequently consider this question. We discovered early on that unfortunately, no one in our immediate group of friends is a qualified doctor. The best we could muster is someone with some first aid training. If a zombie outbreak throws society into chaos and we have to band together to survive, we’d probably need a doctor. You also want someone to take care of security, so someone who’s done some military service could come in handy. (And of course, given my background in economics, I’m of the firm opinion that an economist would be an essential member of the group – you need someone who can carefully consider the opportunity cost of the many difficult choices that will have to be made.)

But the fact is that after an apocalypse, when the world lies in ruins and society has fallen apart and you and a small bunch of stragglers are trying to stay alive, the most important person you can have on your team is a statistician. Without a statistician, you won’t have someone with the skills to carefully consider the data and weigh the evidence before making as carefully informed a decision as they can. When treating new diseases, a doctor who doesn’t know how to test for statistically significant differences between samples won’t know how best to measure and compare results of new treatments. Estimating the long-run supply constraints of munitions stockpiles will be challenging for someone with combat experience but no familiarity with interval estimation.

And this really gets to the heart of it. Advantages of division of labour and comparative advantage aside (you’ll most likely learn about those in your first year economics subjects), as handy as a statistician may be, in many ways it’d be just as good if each post-apocalyptic specialist had just enough relevant training in statistics to do their own job that little bit better. And that’s what your first year statistics subjects are designed to do. They’re not there to turn you into statisticians, though they may do that. They are there so that whatever discipline you choose to pursue in your studies, you’ll be better at it than you would be if you had never studied statistics. An understanding of uncertainty and how data can help us deal with it will make you better in whichever field you pursue. This is true even (or perhaps especially) in the many fields of study outside commerce that neglect to teach quantitative methods to their students, though that’s a discussion for another day.

Ultimately, the point of your compulsory stats subject is not for you to memorise equations, but rather to discover the reasoning and logic behind them – to not just learn how to treat data, but to understand why we treat data the way we do. Statistics is another language, and if you can become fluent in it while being able to translate it for those who have not studied it, you’ll have developed a skill that will set you aside from the competition.