Head First Data Analysis

Chapter 5. Hypothesis Testing: Say it ain’t so

The world can be tricky to explain.

And it can be fiendishly difficult when you have to deal with complex, heterogeneous data to anticipate future events. This is why analysts don’t just take the obvious explanations and assume them to be true: the careful reasoning of data analysis enables you to meticulously evaluate a bunch of options so that you can incorporate all the information you have into your models. You’re about to learn about falsification, an unintuitive but powerful way to do just that.

Gimme some skin...

You’re with ElectroSkinny, a maker of phone skins. Your assignment is to figure out whether PodPhone is going to release a new phone next month. PodPhone is a huge product, and there’s a lot at stake.

PodPhone will release a phone at some point in the future, and ElectroSkinny needs to start manufacturing skins a month before the phone is released in order to get in on the first wave of phone sales.

If they don’t have skins ready for a release, their competitors will beat them to the punch and sell a lot of skins before ElectroSkinny can put their own on the market. But if they manufacture skins and PodPhone isn’t released, they’ll have wasted money on skins that no one knows when they’ll be able to sell.

When do we start making ...