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Understanding statistics - Why understanding statistics matters

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What does it mean to be statistically literate?

The sign in the photo is a whimsical illustration of the difference between being statistically numerate (able to work with numbers) and being statistically literate (able to make sense of numbers). The numbers do add up, however they should not have been added up as they are not comparable units of measurement.

Image: New Cuyama road sign
Source: Mike Gogulski, available at, under Creative Commons Share-Alike 3.0,

To be statistically literate is to be able to make sense of statistics, i.e. to think critically about the information being presented; to understand the context; and to be able to tell the story in the data.

The Australian Bureau of Statistics uses four competencies to describe what is required to be statistically literate:

Data AwarenessInvolves an understanding of the important role of data in society, the different sources of data, what impacts on data quality, and having an understanding of the context within which the data was collected.
Understanding Statistical ConceptsInvolves an understanding of statistical terms, concepts and their appropriate use.
Analyse & Evaluate InformationInvolves analysing, interpreting and evaluating statistical information.
Communicate Statistical InformationInvolves communicating statistical information and understanding in a way that makes it real, relevant and meaningful to the audience, giving the data context and credibility.
Based on Friel, Susan N. et al (2002)

Why is it important to be statistically literate?

Statistics help you to understand and learn from the past, make sense of the present, and make inferences about the future. The value of statistics is only as great as your ability to accurately understand, interpret and evaluate the available information.

The Joy of Stats video featuring Professor Hans Rosling, a well known Swedish statistician and public speaker, provides an engaging insight into the power of understanding statistics.

Link: The Joy of Stats
Source: Free material from

Being statistically literate allows you to access and use data more effectively for informed decision making, including being able to:
  • evaluate number-based claims in the media
  • recognise words that imply much but assert very little
  • understand statements involving rates and percentages
  • critically evaluate statistically-based arguments involving public policy
  • identify consequences, implications or impacts.

Who needs to be statistically literate?

"Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write." Mathematical Statistician Samuel S. Wilks, paraphrasing the words of H. G. Wells, in a 1951 presidential address.

Statistical literacy is relevant to everyone. However, the level of competency and the type of information required can differ, i.e. people who are required to analyse data, interpret it and communicate the findings will have a need for more advanced skills than someone who needs to assess whether the information provided to them in a media advertisement is meaningful.

Commonwealth of Australia 2008

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