Numeracy, gist, literal thinking and the value of nothing in decision making

The onus on the average person is greater than ever before to make sense of large amounts of readily accessible quantitative information, but the ability and confidence to do so are frequently lacking. Many people lack practical mathematical skills that are essential for evaluating risks, probabilities and numerical outcomes such as survival rates for medical treatments, income from retirement savings plans or monetary damages in civil trials. In this Review, we integrate research on objective and subjective numeracy, focusing on cognitive and metacognitive factors that distort human perceptions and foment systematic biases in judgement and decision making. Paradoxically, an important implication of this research is that a literal focus on objective numbers and mechanical number crunching is misguided. Numbers can be a matter of life and death but a person who uses rote strategies (verbatim representations) cannot take advantage of the information contained in the numbers because 'rote' strategies are, by definition, processing without meaning. Verbatim representations (verbatim is only surface form, not meaning) treat numbers as data as opposed to information. We highlight a contrasting approach of gist extraction: organizing numbers meaningfully, interpreting them qualitatively and making meaningful inferences about them. Efforts to improve numerical cognition and its practical applications can benefit from emphasizing the qualitative meaning of numbers in context - the gist - building on the strengths of humans as intuitive mathematicians. Thus, we conclude by reviewing evidence that gist training facilitates transfer to new contexts and, because it is more durable, longer-lasting improvements in decision making.