Blog entry by Orji Anyianuka
Many important business decisions are based on the study of data. For example, Insurance companies set car insurance premiums (the amount they ask you to pay to insure your car) based on calculations of the probability that you will crash your car.
This approach to pricing insurance is reasonable. But it raises a lot of social and ethical questions. What if the data shows that men above 65 years old are more likely to crash their car than the expected average in the population? Should the insurance companies charge men above 65 years old higher premiums because they are higher risks to the insurance companies?
There are no easy answers. In fact, there are rather more questions because men who are above 65 years old will mostly fall under senior citizens who have reached their retirement age and most likely have reduced income as a result.
Statistics answer a lot of questions and help businesses analyse data needed for decision making. However, what businesses decide to do with the data is another question.