Doug Hubbard, author of 'How to Measure Anything', discusses measuring intangible aspects of life, resistance to quantifying certain things, decision-making under uncertainty, the importance of statistical models vs. human intuition, tools for probabilistic predictions, the value of information in decision-making, and enhancing decision-making skills through skepticism and methodological awareness.
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Quick takeaways
Measuring everything with observable consequences is valuable, challenging the idea that some things are immeasurable.
Measuring complex concepts like love requires identifying observable consequences and understanding their meaning.
Resistance to measurement stems from cultural influences and discomfort with quantitative methods, emphasizing the need for better understanding.
Deep dives
Quantitative Measurement and Observable Consequences
Measuring things is crucial as observable consequences make quantification possible. Doug Hubbard discusses how even indirect measurements, like those in physics, are valuable. He challenges the notion that some things are immeasurable, suggesting that clear observable consequences pave the path to measurement.
Challenges in Measuring Concepts like Love
The discussion delves into the challenge of measuring complex concepts like love. While initially deemed immeasurable, the key lies in identifying and describing observable consequences. Hubbard highlights that understanding what one means by such concepts is crucial to the path of measurement.
Prevalence of Bias and Resistance in Quantitative Methods
Hubbard addresses the resistance towards measurement, attributing it to cultural influences and individuals' discomfort with quantitative methods. The correlation between individuals' quantitative aptitudes and their receptiveness to such methods suggests a need for enhancing understanding and value of measurement in decision-making processes.
Importance of Diverse Thinking in Probability Estimation
Combining independent estimates from knowledgeable and calibrated individuals using the odds ratio method can lead to more accurate predictions. The podcast highlights that having uncorrelated experts providing their independent insights can improve prediction accuracy. By aggregating estimates from diverse thinkers through methods like the odds ratio, more reliable conclusions can be drawn. The example given demonstrates how combining estimates from three uncorrelated individuals about the truth of a claim results in a more accurate prediction than just averaging their individual estimates.
Value of Information and Decision-Making
The podcast delves into the concept of the value of information in decision-making processes. It emphasizes the importance of measuring variables based on their impact and uncertainty. By calculating the value of information for uncertain variables in decision models, individuals can prioritize their resources effectively for better decision outcomes. The podcast provides insights into the economic constraints of measurement and highlights the significance of considering both the probability of being wrong and the cost of being wrong in decision-making processes.
Can we measure everything that matters to us? When is measuring the correlates of a thing pretty much just as good as measuring the thing itself? Why are some people resistant to measuring certain things? What are some things people should be measuring but aren't? What's the connection between measuring things and assigning probabilities to events? How much do we know about how well human intuition performs against "doing the math"? How inconsistent are we at applying our own principles in decision-making? What kinds of calibration training are effective? What is "value of information"? What is the Rule of 5? What are the top three things we can do to improve our decision-making?
Douglas Hubbard is an author, consultant, and recognized expert in decision theory and risk analysis. He has written several books on measurement and measuring risk. His work spans various industries including insurance, finance, pharmaceuticals, aerospace, military, energy, government, tech, and nonprofit organizations. Connect with Doug on LinkedIn, email him at dwhubbard@hubbardresearch.com, or learn more about his work at hubbardresearch.com.