The Drunkard’s Walk is not about drinking. Instead, as the subtitle states, the book discusses ‘How Randomness Rules our Lives.’ Although I personally didn’t enjoy this book, I highly recommend it to most people.
There are two categories of people who should not read this book: economists (me) statisticians, or mathematicians. These people will likely already know most of the fundamental concepts which are outlined (in a very entertaining manner) in this book. In addition, you should not read the book if you’ve read the History of Statistics (me). The Drunkard’s Walk has a lot of neat anecdotes about the lives of statisticians and what problems they were trying to overcome wen they developed new statistical methods. These anecdotes, however, are more thoroughly documented in the much denser, much slower, but also much more informative History of Statistics.
To see if you should read this book, check out the following excerpts below:
p. ix: “A few years ago a man won the Spanish national lottery with a ticket that ended in the number 48. Proud of his “accomplishment,” he revealed the theory that brought him the riches. ‘I dreamed of the number 7 for seven straight nights,’ he said, ‘and 7 time 7 is 48.’”
p. 10-11: “There exists a vast gulf of randomness and uncertainty between the creation of a great novel–or piece of jewelry or chocolate-chip cookie–and the presence of huge stacks of that novel–or jewelry or bags of cookies–at the front of thousands of retail outlets. That’s why successful people in every field are almost universally members of a certain set–the set of people who don’t give up.”
On the use of Bayesian Statistics for pricing care insurance: “Consider, for our purposes, a simplified model that places everyone in one of two categories: high risk…and low risk. If when you apply for insurance, you have a driving record that stretches back twenty years without an accident or one that goes back twenty years with thirty-seven accidents, the insurance company can be pretty sure which category to place you in. But if you are a new driver should you be classified as low risk…or high risk…? Since the company has no data on you…it might…start you off by guessing that the changes you are a high risk are, say, 1 in 3. In that case the company would model you as a hybrid–one-third high risk and two-thirds low risk–and charge you one-third the price it charges high risk drivers plus two-thirds the price it charges high risk drivers. Then, after a year of observation…the company can employ the new datum to reevaluate its model, adjust the one-third and two-third proportions it previously assigned, and recalculate what it ought to charge.”
- Leonard Mlodinow. The Drunkard’s Walk: How Randomness Rules Our Lives. Pantheon; 8th Printing edition , 272 pages.