A reader, Rask, just directed me to Anscombe's Quartet on Wikipedia.
It's very important for analysis - it shows how simple statistical measures can fail to show an accurate picture without graphing.
Wikipedia describes this image as "All four sets are identical when examined using simple summary statistics, but vary considerably when graphed" -
Very useful for thinking about. The Wikipedia article goes more into depth, which is important if you're doing numbers-driven analysis. Thanks Rask.
I love this example. I especially like how each data set in the example has a nice model (summary of the data), but of course our most common summary (the regression line, which is the same for each) only makes sense for one of them.
So models and summaries are great, but we should always make sure the model we're using makes sense for the situation at hand.
To make a really long story really short, people feel an emotional need to be consistent with what they publicly commit to. Especially what they write about.
Do you know about the human need for consistency? I'm not going to explain it in detail here, I'm going to assume you already know the basics. If you don't, you probably should drop whatever you're doing for the next few hours and go read up on some articles about it because it has a massive impact on the entire world.
Here's a very brief overview:
In negotiation, consistency, or the consistency principle, refers to a negotiator's strong psychological need to be consistent with prior acts and statements.
Now we move on to the Supply Curve. This is a very basic introduction to the idea of supply and what influences producers to increase or decrease their production. In the video I introduce a simple acronym "Pepper" that summarises these effects. This video and the previous one lay the important foundation for the rest of our analysis in microeconomics so do get a good understanding of them.
I hope you all will find this video helpful and till next time, dream economics.