Stats is powerful. Most math is descriptive (what’s this function look like?) But stats is predictive and you can use it to validate things. In terms of business, I like to use it to validate and quantify the impact of different factors using multiple regression in Excel…
The validation comes from your p values (what’s the odds of seeing a number this extreme by chance? Hopefully <0.05, the standard). You quantify the impact with your coefficient (how large is the effect of this factor on my outcome?) You can use this for all kinds of data sets.
I personally plan on having some fun with this soon. Excel has a free tool you can add-on but I haven’t found one in Google sheets yet. The old one is disabled.
Here’s an example I would try if I had all the housing data in a table: how would selling prices be impacted by size, age, distance from downtown, etc?
Here’s what it looks like: Conducting a Multiple Regression using Microsoft Excel Data Analysis
Kids always ask when I’m going to use math? You can use stats. I remember taking a business simulation course in grad school, realizing I could reverse engineer it with multiple regression. My group wouldn’t listen.
Anyway it’s a cool tool to use along with the 80/20 rule. If you want to find out what matters, how much, and how certain you can be about it, try it out.
