Post on 11-Jul-2015
The Unit EffectWhy we get tricked and how to protect
yourself
Quick!
For the same price, is a 108
month warranty or a nine-
year warranty for a fridge
more worth it?
Really?
O Both durations are exactly the same!
O However, a study by the Journal of
Consumer Research shows that many
consumers believe that 108 months is
more than 9 years
108 Months 9 Years>?????
Why?
O Qualitative data can be manipulated to
appear greater or less than it actually is to
the untrained eye
O ‘Bigger’ numbers does not actually mean
more nor does ‘smaller’ numbers mean
less
What is Qualitative data?
O Items are categorized in terms of informal
or relatively ill-defined characteristics
E.g. Warmth and flavor
Opposite: Quantitative data or Numerical data
Data measured or identified on a numerical scale.
Numerical data can be analyzed using statistical methods, and
results can be displayed using tables, charts, histograms and
graphs.E.g. The temperature at 5.27 p.m. was 22.4° Celsius
The ‘Unit Effect’
O This is the name given to the fatal error
where people assume that
O Higher numbers represent bigger
quantities
O And lower numbers represent smaller
quantities
Why?
O People typically fail to realize that the unit
of quantitative information is arbitrary
O They just focus on the number of scale
units used to determine how much or how
manyArbitraryadjective / ä̍rbiˈtrerē/
Based on random choice or personal whim, rather than any
reason or system
Abuses
O Marketing Advertisements
O Only $2.50 per day for 3 years!
O Or $2737.5
O Statistics in presentations and proposals
O People subconsciously believe that the
difference between 9 and 9.5 out of 10 is
less than 90 and 95 out of 100
Counters
O The study also shows that the moment we are reminded of the relations between units such as 31 days is 1 month, the ‘unit effect’ no longer works
O Have a good understanding of units and conversion
O Be wary of too good deals or too perfect statistics
O Ask yourself questions and try to see the numbers in a different unit
Reflections
In our daily lives, we are often misled by
these ‘tricky’ numbers in advertisements.
We must take care when purchasing
merchandise, whether we are spending $1
or $1000. Just a quick mental check can
save you quite a tidy sum of money. Think
twice before you spend.
SourcesO https://www.jcr-
admin.org/files/pressreleases/021411153938_Pandelaererelease.pdf
O http://money.bundle.com/article/how-larger-numbers-trick-us-spending
O http://arstechnica.com/science/news/2011/02/students-think-that-bigger-numbers-must-mean-something.ars
O http://www.truthpizza.org/logic/stats.htm
O http://t1.gstatic.com/images?q=tbn:ANd9GcRTf1cA_wW2RTO1hhT3Ci5YRn822wuitgyqvqO4R4rjjn-VNaEG1w
O http://t1.gstatic.com/images?q=tbn:ANd9GcSRtF5nAUnYA6tIQzYwnCS7PtDvFGtALvFkocdj8-7yUXQTPheq
O http://t1.gstatic.com/images?q=tbn:ANd9GcR3Xz1JgElgTYPl_1XWaQLS3sDnearjo3wmd7PoOWYwp06jEnG2
O http://t3.gstatic.com/images?q=tbn:ANd9GcRux-VsE7a1ZTS9pltmKTx3tEnqoZ595xfVzjeIHpGhrxZYRnDMrg
The EndThank you