Saturday, July 19, 2008

What do the GMAT and crack dealers who still live with their moms have in common?

So I was trekking in the Indian Himalayas (Ladakh) - fantastic trip. Unfortunately, when I wanted to fly back to Delhi my flight got canceled because of bad weather. They put me on the next available flight - which was 3 days later!!! If you happen to go to the Ladakh region (the city there is called Leh) then plan for some contingency days. Some people at the airport were really furious about missing connecting flights to Europe in Delhi.

Anyways, back to the weird title of this post. During the 3 days I had to wait in Leh, I had plenty of time to finish the book I was reading: Freakonomics by Steven D. Levitt. I found that this book would be a good read for those wanting to improve on their GMAT verbal critical reasoning problems! The author uses statistical data to answer weird questions (e.g. why crack dealers still live with their moms). He discusses correlations and causalities of data, similar to some of the GMAT verbal critical reasoning problems. For example, you might recall something like:

Company X increased its advertising expenditures. As a result, more TV ads were broadcast and hence its brand awareness among TV viewers increased. Sales increased over the next quarters.
What can we say about advertising expenditures for company X?
a) Increasing them led to higher sales in subsequent quarters
b) Increasing then led to higher brand awareness among TV viewers
c) I hate TV commercials

Answer b) would probably be best. Now an example from the book: In the 90s, the crime rate was falling sharply while the economy was booming, more cops were employed and policing strategies were introduced. The media quickly used these events to explain the drop in crime rates. But just as with the GMAT example above, these occurrences just come in handy as an explanation, the same way higher advertising expenditures could be a good reason for higher sales (but maybe a better product was launched, or the main competitor shut down, etc.). If you're interested, according to the book, the biggest factor for the reduction in crime in the 90s was the legalization of abortion in the 70s (pretty shocking, can you guess why?).

So what do the GMAT and crack dealers who still live with their moms have in common? I don't know :-)! Maybe it's that both enjoy a monopoly. The crack dealer usually has the exclusive distribution rights (backed by his gang) to sell crack in a certain area. The GMAT guys have the monopoly on standardized tests for b-schools around the world. Man, maybe I should have written a book during my 3 day wait on things the GMAT has in common with random stuff.

1 comment:

Anshuman said...

Very Intersting!!!!