ACE on the Unit Effect

1. The Unit Effect Why we get tricked and how to protect yourself

2. Quick! For the same price, is a 108 month warranty or a nine-yearwarranty for a fridge more worth it?

3. Really? Both durations are exactly the same! However, a study by the Journal of Consumer Research shows that many consumers believe that 108 months is more than9 years > 108 Months 9 Years ?????

4. Why? Qualitative data can be manipulated to appear greater or less than it actually is to the untrained eye ‘Bigger’ numbers does not actually mean more nor does ‘smaller’ numbers mean less

5. What is Qualitative data? 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

6. The ‘Unit Effect’ This is the name given to the fatal error where people assume that Higher numbers represent bigger quantities And lower numbers represent smaller quantities

7. Why? People typically fail to realize that the unit of quantitative information is arbitrary They just focus on the number of scale units used to determine how much or how many Arbitrary adjective /ˈärbiˌtrerē/ Based on random choice or personal whim, rather than any reason or system

8. Abuses Marketing Advertisements Only $2.50 per day for 3 years! Or $2737.5 Statistics in presentations and proposals People subconsciously believe that the difference between 9 and 9.5 out of 10 is less than 90 and 95 out of 100

9. Counters 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 Have a good understanding of units and conversion Be wary of too good deals or too perfect statistics Ask yourself questions and try to see the numbers in a different unit

10. 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.

11. Sources https://www.jcr-admin.org/files/pressreleases/021411153938_Pandelaererelease.pdf http://money.bundle.com/article/how-larger-numbers-trick-us-spending http://arstechnica.com/science/news/2011/02/students-think-that-bigger-numbers-must-mean-something.ars http://www.truthpizza.org/logic/stats.htm http://t1.gstatic.com/images?q=tbn:ANd9GcRTf1cA_wW2RTO1hhT3Ci5YRn822wuitgyqvqO4R4rjjn-VNaEG1w http://t1.gstatic.com/images?q=tbn:ANd9GcSRtF5nAUnYA6tIQzYwnCS7PtDvFGtALvFkocdj8-7yUXQTPheq http://t1.gstatic.com/images?q=tbn:ANd9GcR3Xz1JgElgTYPl_1XWaQLS3sDnearjo3wmd7PoOWYwp06jEnG2 http://t3.gstatic.com/images?q=tbn:ANd9GcRux-VsE7a1ZTS9pltmKTx3tEnqoZ595xfVzjeIHpGhrxZYRnDMrg

12. The End Thank you