Statistics

I've been thinking on all of those auto insurance company ads. Customers who switched to this company saved an average of $x and to that company an average of $y and to the other company an average of $z. Wow!

What's fascinating is how this is one of those statistics that is essentially meaningless, plenty of which float around in the world.

Let's say 1,000 people look at switching from AllFarm Auto to ProGeico, or vice vera. Of that 100,000 people, 62 of them actually end up switching. Why do they switch? Well, probably because they'll save money, because otherwise you aren't going to switch. Lo and behold, you now have a statistic. Those 62 people saved an average of $629.39. If even 100 people thought of looking, that average savings becomes $390. 750 people it's all of $52, and how many people want to go to the hassle of switching companies to save $52/year?

So all of these car insurance statistics are saying no more and no less than "people who switch insurance companies do it to save money, people who can't save money switching probably don't." But as to which company actually has the best prices overall, if you went out and priced for 50,000 policies?

Here's another shocking statistic: Teams that are winning baseball games after 7 or 8 innings tend to win most of those games. Even bad teams, even teams with bad closers.