A shortcut for making less-biased predictions, taking base averages into account.
Regarding this problem: "Julie is currently a senior in a state university. She read fluently when she was four years old. What is her grade point average (GPA)?"
Recall that the correlation between two measures - in the present case, reading age and GPA - is equal to the proportion of shared factors among their determinants. What is your best guess about that proportion? My most optimistic guess is about 30%. Assuming this estimate, we have all we need to produce an unbiased prediction. Here are the directions for how to get there in four simple steps:
- Start with an estimate of average GPA.
- Determine the GPA that matches your impression of the evidence.
- Estimate the correlation between your evidence and GPA.
- If the correlation is .30, move 30% of the distance from the average to the matching GPA.
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