2.5 Comparing Expectations to Data

Now that you have data in hand (the check at the restaurant), the next step is to compare your expectations to the data. There are two possible outcomes: either your expectations of the cost match the amount on the check, or they do not. If your expectations and the data match, terrific, you can move onto the next activity. If, on the other hand, your expectations were a cost of 30 dollars, but the check was 40 dollars, your expectations and the data do not match. There are two possible explanations for the discordance: first, your expectations were wrong and need to be revised, or second, the check was wrong and contains an error. You review the check and find that you were charged for two desserts instead of the one that you had, and conclude that there is an error in the data, so ask for the check to be corrected.

One key indicator of how well your data analysis is going is how easy or difficult it is to match the data you collected to your original expectations. You want to setup your expectations and your data so that matching the two up is easy. In the restaurant example, your expectation was $30 and the data said the meal cost$40, so it’s easy to see that (a) your expectation was off by $10 and that (b) the meal was more expensive than you thought. When you come back to this place, you might bring an extra$10. If our original expectation was that the meal would be between $0 and$1,000, then it’s true that our data fall into that range, but it’s not clear how much more we’ve learned. For example, would you change your behavior the next time you came back? The expectation of a \$30 meal is sometimes referred to as a sharp hypothesis because it states something very specific that can be verified with the data.