agent Entrepreneur logo
MenuMENU
SearchSEARCH

A Timely Math Lesson

How small statistical samples can lead you in the wrong direction.

by Hannah Mitchell
January 16, 2025
A Timely Math Lesson

Picking out an extreme statistical example in meetings with customers can be misleading.

Credit:

Pexels/Lukas

3 min to read


Math was always my weakest subject in school, and I studiously avoided the more advanced courses as much as possible. Though I did take statistics in college, I remember nothing from the class, at least not consciously.

My career as a writer and editor has ironically forced me to get better at my everyday use of numbers to make sense of data and communicate it to readers. And in my current reading of a book by Nobel Prize-winning psychologist and researcher Daniel Kahneman, who died last March, I’m learning more that’s helping me make better sense of automotive industry statistics.

Ad Loading...

Thinking, Fast and Slow,” published in 2011, is jam-packed with insights on how the human mind works, from decision-making to how we form impressions and interpret our world. 

One chapter in particular helped me gain new insight that could come in handy in the F&I office. It digs into how small research samples can be misleading. An example is a high rate of new kidney cancer cases in sparsely populated U.S. counties. Kahneman explains that, “extreme outcomes (both high and low) are more likely to be found in small than in large samples.”

So when I saw a recent LendingTree study about car thefts that pointed out a dramatic spike in Vermont between 2020 and 2022, I left the example out of my news item on the report. That’s because Vermont is the second smallest state by population, with far fewer residents than many larger U.S. cities. It’s an example of an extreme outcome.

What does this have to do with F&I? I share it because F&I managers need examples of the latest research to demonstrate their expertise and make relevant points to customers. Picking out extreme examples such as the Vermont theft rate could be misleading, painting a picture of car thieves run amuck on every street in the largely rural state, whereas the theft rate per 100,000 residents in 2023 would offer much more reality. The District of Columbia leads that list at about 1,150, according to LendingTree data.

Or as Kahneman further explained in the kidney cancer example:

Ad Loading...

“The incidence of cancer is not truly lower or higher than normal in a county with a small population, it just appears to be so in a particular year because of an accident of sampling. If we repeat the analysis next year, we will observe the same general pattern of extreme results in the small samples, but the counties where cancer was common last year will not necessarily have a high incidence this year.”

Even though I hated math growing up, I did appreciate the rare math teacher who was good at breaking it down into bite-sized steps that even I could absorb and understand. Kahneman was just one of those teachers that I happened upon. Hopefully his analysis will help you, too.

Hannah Mitchell is executive editor of F&I and Showroom.A former daily newspaper journalist, she honed her craft covering politics, business and more for publications that included the Charlotte Observer and the Orange County (Calif.) Business Journal. She holds a master’s degree in journalism from Columbia University, and her first car was a hand-me-down Chevrolet Nova.

Originally posted on F&I and Showroom

Subscribe to Our Newsletter

More Industry

Photo of MINI nameplate on the hood of a white MINI Cooper
Industryby Hannah MitchellJuly 23, 2026

Autos More Appealing

Consumers gave new cars better scores again this year for design, performance and more as mass-market brands kept gaining on premium lineups, JD Power found in an annual poll.

Read More →
red car parked in front of a sunset, The Used Market Divide, Agent Entrepreneur
Industryby Lauren LawrenceJuly 23, 2026

Used EVs Defy Overall Market

While the used-car market saw three months of price declines or stagnation, the used EV segment did the opposite – rising for three straight months.

Read More →
Photo of a retriever dog looking out of an open SUV window with a yellow Peugeot headrest on the top of the window below it
Industryby Hannah MitchellJuly 16, 2026

Gone to the Dogs

A Stellantis brand decided to have some fun with one of its SUVs’ design to address growing emphasis on family pets.

Read More →
Ad Loading...
Aerial shot of a car dealership
Industryby Hannah MitchellJuly 13, 2026

OEM Poll Sees Industry Evolution

Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.

Read More →
Foreign Cars Italia dealership store in front of sunset
Industryby Hannah MitchellJuly 2, 2026

Luxe N.C. Dealerships Change Hands

A collection of Italian and English brand franchises were handed off to the owner’s friend in the business and include the Carolinas’ only Ferrari retail stores.

Read More →
inside of car, person with hands on black steering wheel
Industryby Lauren LawrenceJuly 2, 2026

Exposure Drives Interest in Chinese Cars

At a recent demonstration, consumers had the chance to ride in a Chinese-branded vehicle, a firsthand experience that improved their perceptions and purchase intent.

Read More →
Ad Loading...
Woman's hands holding an wallet empty of cash
Industryby Hannah MitchellJuly 1, 2026

Automotive Consumers Sink Further in Debt

Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.

Read More →
Rob Mancuso sitting in a chair on stage
Industryby Hannah MitchellJuly 1, 2026

Agent Advocate

Rob Mancuso, who comes from a long line of auto dealers, values general agents’ place in the industry and makes a case for them taking an even bigger seat at the table.

Read More →
Photo of a touchscreen on a car's dashboard
Industryby Hannah MitchellJune 25, 2026

Driving Under Distraction

Though consumers gave higher marks to new vehicles in JD Power’s most recent initial-quality poll, high-tech interference worsened, pointing to craving for simplicity.

Read More →
Ad Loading...
split background green and blue. 2019 to 2025 with car going from starting location to end point. $37,310 and $48,402. Agent Entrepreneur logo
Industryby Lauren LawrenceJune 25, 2026

Affordable New Cars a Thing of the Past

More than one out of five new vehicles sell for more than $60,000, according to Edmunds. That's up 7% compared to prepandemic 2019.

Read More →
Ad Loading...