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18 Cognitive Bias Examples Show Why Mental Mistakes Get Made

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18 Cognitive Bias Examples Show Why Mental Mistakes Get Made

18 Cognitive Bias Examples

View the high resolution version of today’s graphic by clicking here.

Out of the 188 cognitive biases that exist, there is a much narrower group of biases that has a disproportionately large effect on the ways we do business.

These are things that affect workplace culture, budget estimates, deal outcomes, and our perceived return on investments within the company.

Mental mistakes such as these can add up quickly, and can hamper any organization in reaching its full bottom line potential.

Cognitive Bias Examples

Today’s infographic from Raconteur aptly highlights 18 different cognitive bias examples that can create particularly difficult challenges for company decision-making.

The list includes biases that fall into categories such as financial, social, short term-ism, and failure to estimate:

Financial biases
These are imprecise mental shortcuts we make with numbers, such as hyperbolic discounting – the mistake of preferring a smaller, sooner payoff instead of a larger, later reward. Another classic financial cognitive bias example is the “Ostrich effect”, which is where one sticks their head in the sand, pretending that negative financial information simply doesn’t exist.

Social biases
Social biases can have a big impact on teams and company culture. For example, teams can bandwagon (when people do something because other people are doing it), and individual team members can engage in blind spot bias (viewing oneself as less biased than others). These both can lead to worse decision-making.

Short Term-isms
One way to ensure a business that doesn’t last? Engage in short term-isms – fallacies that gear your business towards decisions that can be rationalized now, but that don’t add any long-term value. Status quo bias and anchoring are two ways this can happen.

Failure to Estimate
So much about business relies on making projections about the future, and the biases in this category make it difficult to make accurate estimates. Cognitive bias examples here include the availability heuristic (just because information is available, means it must be true), and the gambler’s fallacy (future probabilities are altered by past events).

Want more on cognitive biases? Here are five main biases that impact investors, specifically.

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Misc

Mapped: Each Region’s Median Age Since 1950

The world’s population is aging, but not at the same rate. This animated map visualizes the changes in median age in every region since 1950.

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median age by region

Mapped: Each Region’s Median Age Since 1950

Over the last 70 years, the global population has gotten older. Since 1950, the worldwide median age has gone from 25 years to 33 years.

Yet, despite an overall increase globally, not all regions have aged at the same rate. For instance, Europe’s median age has grown by 14 years, while Africa’s has only increased by 1 year.

Today’s animated map uses data from the UN Population Index to highlight the changes in median age over the last 70 years, and to visualize the differences between each region. We also explain why some regions skew older than others.

Factors that Affect a Region’s Median Age

Before diving into the numbers, it’s important to understand the key factors that influence a region’s median age:

  1. Fertility Rate
    The average number of children that women give birth to in their reproductive years. The higher the fertility rate, the younger a population skews. Since 1950, the global fertility rate has dropped by 50%.
  2. Mortality Rate
    The number of deaths in a particular region, usually associated with a certain demographic or period in time. For example, global child mortality (children who have died under five years of age) has been on the decline, which has contributed to an increase in the average life expectancy across the globe.
  3. Migration
    International migration may lower a region’s population since migrants are usually younger or working age. In 2019, there were 272 million migrants globally.

The Change in Median Age

As mentioned, not all regions are created equal. Here’s how much the median age has changed in each region since 1950:

The Highs

Regions that have seen the most growth and generally skew older are Latin America, followed by Europe and Asia.

Interestingly, Asia’s notable increase is largely influenced by Japan, which has the oldest population on the planet. The country has seen a significant increase in median age since 1950—it’s gone from 22 to 48 years in 2020. This can be explained by its considerably low fertility rate, which is 1.4 births per woman—that’s less than half the global average.

But why is Japan’s fertility rate so low? There are more women in the workforce than ever before, and they are too busy to take on the burden of running a household. Yet, while women are more prosperous than ever, the workforce in general has taken a hit.

Japan’s recession in the early 1990s led to an increase in temporary jobs, which has had lasting effects on the region’s workforce—in 2019, about 1 in 5 men were working contract jobs with little stability or job growth.

The Lows

In contrast to Asia’s growth, Africa has seen the lowest increase in median age. The region’s population skews young, with over 60% of its population under the age of 25.

Africa’s young population can be explained by its high birth rate of 4.4 births per woman. It also has a relatively low life expectancy, at 65 years for women and 61 years for men. To put things into perspective, the average life expectancy across the globe is 75 years for women and 70 years for men.

Another trend worth noting is Oceania’s relatively small growth. It’s interesting because the region’s fertility rate is almost on par with the global average, at 2.4 births per woman, and the average life expectancy doesn’t differ much from the norm either.

The most likely reason for Oceania’s stagnant growth in median age is its high proportion of migrants. In 2019, the country had 8.9 million international migrants, which is 21% of its overall population. In contrast, migrants only make up 10% of North America’s population.

Unique Challenges for Every Region

Age composition has significant impacts on a region’s labor force, health services, and economic productivity.

Regions with a relatively high median age face several challenges such as shrinking workforce, higher taxes, and increasing healthcare costs. On the other end of the spectrum, regions with a younger population face increased demand for educational services and a lack of employment opportunities.

As our population worldwide continues to grow and age, it’s important to bring attention to issues that impact our global community. World Population Day on July 11, 2020, was established by the UN to try and solve worldwide population issues.

“The 2030 Agenda for Sustainable Development is the world’s blueprint for a better future for all on a healthy planet. On World Population Day, we recognize that this mission is closely interrelated with demographic trends including population growth, aging, migration, and urbanization.”

– UN Secretary-General António Guterres

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Misc

The 44 Closest Stars and How They Compare to our Sun

This graphic visualizes the 44 closest stars, revealing key facts such as distance from Earth, brightness, and whether potential planets are in orbit.

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44 closest stars

44 Closest Stars and How They Compare to our Sun

Humans have been fascinated by the stars in the night sky since the dawn of time.

We’ve been decoding the mysteries of celestial bodies for many centuries, but it is only in the last 200 years or so that we’ve been able to glean more detailed information on the lights that dot the night sky. Friedrich Bessel’s method of stellar parallax was a breakthrough in accurately measuring the positions of stars, and opened new doors in the effort to map our universe. Today, high-powered telescopes offer even more granular data on our cosmic neighborhood.

The infographic above, from Alan’s Factory Outlet, categorizes the 44 closest stars to Earth, examining the size, luminosity, constellations, systems, and potential planets of each star.

Our Nearest Stellar Neighbors

Our closest neighboring stars are all part of the same solar system: Alpha Centauri. This triple star system – consisting of Proxima Centauri, Alpha Centauri A, and Alpha Centauri B – attracts a lot of interest because it hosts planets, including one that may be similar to Earth.

The planet, Proxima Centauri b, is a lot closer to its star than Earth is to the Sun. However, because Proxima Centauri is a smaller and cooler red dwarf type star, the planet’s orbit is within the habitable zone. It’s thought that Proxima Centauri b receives approximately the same amount of solar energy as Earth does from our Sun.

Here’s a full list of the 44 of the closest stars to Earth:

Star NameDistance (light years)MoE
Sun0.000016±0.0011
Proxima Centauri4.37±0.0068
α Centauri A4.37±0.0068
α Centauri B4.37±0.0068
Barnard's Star5.96±0.0032
Wolf 3597.86±0.031
Lalande 211858.31±0.014
Sirius A8.66±0.010
Sirius B8.66±0.010
Luyten 726-8 A8.79±0.012
Luyten 726-8 B8.79±0.012
Ross 1549.70±0.0019
Ross 24810.29±0.0041
Epsilon Eridani10.45±0.016
Lacaille 935210.72±0.0016
Ross 12811.01±0.0026
EZ Aquarii A11.11±0.034
61 Cygni A11.40±0.0012
61 Cygni B11.40±0.0012
Procyon A11.40±0.032
Procyon B11.40±0.032
Struve 2398 A11.49±0.0012
Struve 2398 B11.49±0.0012
Groombridge 34 A11.62±0.0008
Groombridge 34 B11.62±0.0008
DX Cancri11.68±0.0056
Tau Ceti11.75±0.022
Epsilon Indi11.87±0.011
Gliese 106111.98±0.0029
YZ Ceti12.11±0.0035
Luyten's Star12.20±0.036
Teegarden's Star12.50±0.013
SCR 1845-635713.05±0.008
Kapteyn's Star12.83±0.0013
Lacaille 876012.95±0.0029
Kruger 60 A13.07±0.0052
Kruger 60 B13.07±0.0052
Wolf 106114.05±0.0038
Wolf 424 A14.05±0.26
Van Maanen's star14.07±0.0023
Gliese 114.17±0.0037
TZ Arietis14.58±0.0070
Gliese 67414.84±0.0033
Gliese 68714.84±0.0022

Even though we see many of these stars in the night sky, humans aren’t likely to see them in person any time soon. To put these vast distances into perspective, if the Voyager spacecraft were to travel to Proxima Centauri, it would take over 73,000 years to finally arrive.

The Brightest Stars in the Sky

The closest stars aren’t necessarily the ones most visible to us here on Earth. Here are the top 10 stars in terms of visual brightness from Earth:

RankProper nameConstellationVisual magnitude (mV)Distance (light years)
1SunN/A−26.740.000016
2SiriusCanis Major−1.468.6
3CanopusCarina−0.74310.0
4Rigil Kentaurus & TolimanCentaurus−0.27 (0.01 + 1.33)4.4
5ArcturusBoötes−0.0537.0
6VegaLyra0.03 (−0.02–0.07var)25.0
7CapellaAuriga0.08 (0.03–0.16var)43.0
8RigelOrion0.13 (0.05–0.18var)860.0
9ProcyonCanis Minor0.3411.0
10AchernarEridanus0.46 (0.40–0.46var)139.0

Excluding our Sun, the brightest star visible from Earth is Sirius, or the Dog Star. Sirius, which is about 25 times more luminous than the sun, visually punctuates the constellation Canis Major.

Filling in the Gaps

The next step in learning more about our surroundings in the cosmos will be seeing which of the stars listed above have planets orbiting them. So far, the 44 stars in the infographic have over 40 planets scattered among them, though new discoveries are made all the time.

With each new mission and discovery, we learn a little bit more about our pocket of the universe.

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