environment in which some children are malnourished. Differences in
nutrition will become important, the proportion of shared factors will
diminish, and with it the correlation between the height of parents and the
height of children (unless the parents of malnourished children were also
stunted by hunger in childhood).
height and weight : The correlation was computed for a very large sample
of the population of the United States (the Gallup-Healthways Well-Being
Index).
income and education : The correlation appears impressive, but I was
surprised to learn many years ago from the sociologist Christopher Jencks
that if everyone had the same education, the inequality of income
(measured by standard deviation) would be reduced only by about 9%.
The relevant formula is v (1–r^2 ), where r is the correlation.
correlation and regression : This is true when both variables are measured
in standard scores—that is, where each score is transformed by removing
the mean and dividing the result by the standard deviation.
confusing mere correlation with causation : Howard Wainer, “The Most
Dangerous Equation,” American Scientist 95 (2007): 249–56.

18: Taming Intuitive Predictions

far more moderate : The proof of the standard regression as the optimal
solution to the prediction problem assumes that errors are weighted by the
squared deviation from the correct value. This is the least-squares
criterion, which is commonly accepted. Other loss functions lead to
different solutions.

19: The Illusion of Understanding

narrative fallacy: Nassim Nicholas Taleb, The Black Swan : The Impact of
the Highly Improbable (New York: Random House, 2007).
one attribute that is particularly significant :.
throwing the ball : Michael Lewis, Moneyball: The Art of Winning an Unfair
Game (New York: Norton, 2003).
sell their company : Seth Weintraub, “Excite Passed Up Buying Google for
$750,000 in 1999,” Fortune , September 29, 2011.
ever felt differently : Richard E. Nisbett and Timothy D. Wilson, “Telling
More Than We Can Know: Verbal Reports on Mental Processes,”
Psychological Review 84 (1977): 231–59.
United States and the Soviet Union : Baruch Fischhoff and Ruth Beyth, “I