Stats
Fractions are funny (December 13, 2005)
Category: Measuring
benefit/risk
On my web page about odds ratios, I
point out the fractions are funny and cite some well known examples of how
fractions behave in a counter intuitive fashion. One of the examples I cite
is a Car Talk Puzzler problem about a 100 pound sack of potatoes. I
cited the puzzler book that Tom and Ray Magliozzi had published:
- A Haircut in Horse Town: And Other Great Car Talk Puzzlers.
(1999) Tom Magliozzi, Ray Magliozzi, Douglas Berman. New York NY: Berkley
Publishing Group.
but you can also find this question and answer on the web at
Just recently, the Car Talk guys published another examples of how
fractions are funny. It is a simpler example, but it is still interesting.
One year National Public Radio decides to give Tom a 10% raise and Ray a 10%
pay cut (for PPP -- Poor Puzzler Performance). The following year, Tom gets
the 10% pay cut and Ray gets a 10% raise. They ask who ends up with more
money.
The answer is surprising, not in who gets more money but the fact that both
of them are making less money after two years, even though they seemed to get
offsetting pay raises and pay cuts. The full details of this puzzler question
and answer are at
The fact that a 10% raise and 10% pay cut do not offset one another may not
be immediately apparent, but when you consider a more extreme case, a 100%
pay raise and a 100% pay cut, it becomes more apparent.
07/08/2008.
