November 23, 2024 #Statistical Inference#Statistical Traps#Simpson's Paradox#A/B Testing
A familiar tension keeps showing up: people feel poorer year after year while the official average wage keeps climbing; neighbors swear local home prices are rising while the national statistics bureau reports a small year-on-year dip. That gap is usually not anyone's imagination — the numbers get quietly distorted somewhere between being collected, summarized, and reported. This post walks through the seven most common statistical traps in everyday data, grouped by where the distortion comes from: small-sample induction and [survivorship bias](https://en.wikipedia.org/wiki/Survivorship_bias), skewed-distribution means and missing significance tests, confounders and [Simpson's paradox](https://en.wikipedia.org/wiki/Simpson%27s_paradox), and finally cherry-picking and [Goodhart's law](https://en.wikipedia.org/wiki/Goodhart%27s_law) — each illustrated with a concrete example, then unpacked into its cause, its mathematical core, and its professional remedy.