The Signal and the Noise: the Art and Science of Prediction
Author: Nate Silver
Every time we choose a route to work, decide whether to go on a second date, or set aside money for a rainy day, we are making a prediction about the future. Yet from the global financial crisis to 9/11 to the Fukushima disaster, we routinely fail to foresee hugely significant events, often at great cost to society. In The Signal and the Noise, the New York Times political forecaster Nate Silver explores the art of prediction, revealing how we can all develop better foresight in an unpredictable world.
In his quest to build a more accurate crystal ball, Silver visits hundreds of expert forecasters in a range of areas, from the stock market to the poker table, from earthquakes to the economy, and studies what lies behind their success. What can we learn from their techniques? What patterns have they uncovered? And in a world of Big Data, are we getting any closer to the truth? As Silver discovers, most predictions fail because humans are wired to detect patterns, and we often mistake noisy data for a signal.
By analysing the rare prescient forecasts, and applying a more quantitative lens to everyday life, Silver distils the essential lessons of prediction, from the importance of embracing uncertainty to the need to think small. In the course of his investigation, Silver discovers unexpected patterns and connections, such as what earthquake detection can teach us about terrorist attacks, and how the insights of an 18th century English mathematician help unlock the 21st century challenges of global warming and disease.
In this enthralling insider's tour of the high-stakes world of forecasting, Nate Silver reveals how we can all learn to make better predictions in our own lives.
'Outstanding. The analysis of the subprime crisis is as lucid as any I have read... [The Signal and the Noise] is fun to read... Silver has produced a signal that is a pleasure to follow.' Tim Harford, Financial Times
'Fascinating... Statisticians are to our age what engineers were to the Victorians, the makers of the particular forms of truth we value and crave. Nate Silver, to pursue the analogy, is being tipped to be our age's Brunel.' Bryan Appleyard, Sunday Times
'In the spirit of Nassim Nicholas Taleb's widely read The Black Swan, Mr Silver asserts that humans are overconfident in their predictive abilities, that they struggle to think in probabilistic terms and build models that do not allow for uncertainty... Silver has certainly earned the right to an audience.' Economist
'Ranges confidently across sports, politics, weather and gambling... Balanced, intelligent and erudite.' Spectator
'Engagingly written... wholly satisfying... It could turn out to be one of the more momentous books of the decade.' The New York Times Book Review
'In this important book, Nate Silver explains why the performance of experts varies from prescient to useless and why we must plan for the unexpected. Must reading for anyone who cares about what might happen next.' Richard Thaler, author of Nudge
'A whirlwind tour of the success and failure of predictions in a wide variety of fields... Mr. Silver's breezy style makes even the most difficult statistical material accessible. What is more, his arguments and examples are painstakingly researched.' Wall Street Journal