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The Unit Effect


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ACE on the Unit Effect

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The Unit Effect

  1. 1. The Unit Effect<br />Why we get tricked and how to protect yourself<br />
  2. 2. Quick!<br />For the same price, is a 108 month warranty or a nine-yearwarranty for a fridge more worth it?<br />
  3. 3. Really?<br />Both durations are exactly the same!<br />However, a study by the Journal of Consumer Research shows that many consumers believe that 108 months is more than9 years<br />><br />108 Months 9 Years<br />?????<br />
  4. 4. Why?<br />Qualitative data can be manipulated to appear greater or less than it actually is to the untrained eye<br />‘Bigger’ numbers does not actually mean more nor does ‘smaller’ numbers mean less<br />
  5. 5. What is Qualitative data?<br />Items are categorized in terms of informal or relatively ill-defined characteristics <br /> E.g. Warmth and flavor<br />Opposite: Quantitative data or Numerical data <br />Data measured or identified on a numerical scale. <br />Numerical data can be analyzed using statistical methods, and results can be displayed using tables, charts, histograms and graphs.<br />E.g. The temperature at 5.27 p.m. was 22.4° Celsius<br />
  6. 6. The ‘Unit Effect’<br />This is the name given to the fatal error where people assume that <br />Higher numbers represent bigger quantities<br />And lower numbers represent smaller quantities<br />
  7. 7. Why?<br />People typically fail to realize that the unit of quantitative information is arbitrary<br />They just focus on the number of scale units used to determine how much or how many<br />Arbitrary<br />adjective /ˈärbiˌtrerē/<br />Based on random choice or personal whim, rather than any reason or system<br />
  8. 8. Abuses<br />Marketing Advertisements<br />Only $2.50 per day for 3 years!<br />Or $2737.5<br />Statistics in presentations and proposals<br />People subconsciously believe that the difference between 9 and 9.5 out of 10 is less than 90 and 95 out of 100<br />
  9. 9. Counters<br />The study also shows that the moment we are reminded of the relations between units such as 31 days is 1 month, the ‘unit effect’ no longer works<br />Have a good understanding of units and conversion<br />Be wary of too good deals or too perfect statistics<br />Ask yourself questions and try to see the numbers in a different unit<br />
  10. 10. Reflections<br />In our daily lives, we are often misled by these ‘tricky’ numbers in advertisements. We must take care when purchasing merchandise, whether we are spending $1 or $1000. Just a quick mental check can save you quite a tidy sum of money. Think twice before you spend.<br />
  11. 11. Sources<br /><br /><br /><br /><br /><br /><br /><br /><br />
  12. 12. The End<br />Thank you<br />