People Don't Understand Probability

For my first substantive post here I'm going to take a look at an issue that's bugged me for some time. Reading a recent article written by Ervin Laszlo that once again demonstrated the problem is actually what finally pushed me to go ahead and start blogging.

The argument he presents is one a lot of people throw around without really understanding what they're saying. It can be basically summed up as "This thing happened... it was amazingly unlikely this thing happened by chance... therefore something must have caused/created/designed it." In order to illustrate why that article is completely wrong I usually find it's easier to deal with a different example of highly improbable outcomes occurring.

The odds of winning the Powerball lottery purchasing a single ticket are roughly 1 in 195 million. Let's say last week Joe Lucky bought one ticket and won the jackpot. The odds of him doing this by chance were, as stated, 195 million to 1. That's ridiculously unlikely. Do we therefore conclude the lottery was somehow designed to make him win since it was so unlikely that he would win by chance?

No, we don't. Most people understand that we don't. What most people do not fully understand is the reason we don't.