How to Attack a Guesstimate

Guesstimates are commonly asked during interviews for jobs where on-the-spot quantitative ability is useful. Generally, your interviewer asks you to estimate the size of a market in the United States, and observes your reasoning process. Most interviewers don't care if you actually get the correct number - what they want to see is that you are able to logically think through a process, creatively think through any possible exceptions or short cuts, and calculate basic sums in your head. You won't be given any real data (though you won't need to know much more beyond that the United States has about 270 million inhabitants and 25 million businesses), and you shouldn't request any; it's irrelevant to the problem at hand. Make reasonable assumptions, with easy-to-work-with numbers, and go from there (remember that you're expected to use a pen and notepad to work through your calculations). Let's work through an example:

Q: HOW MANY GALLONS OF WHITE HOUSEPAINT ARE SOLD IN THE U.S. EVERY YEAR?

THE "START BIG" APPROACH: If you're not sure where to begin, start with the basic assumption that there are 270 million people in the U.S. (or 25 million businesses, depending on the question). If there are 270 million people in the United States, perhaps half of them live in houses (or 135 million people). The average family size is about 3, so there would be 45 million houses in the United States. Let's add another 10 percent to that for second houses and houses used for other purposes besides residential. So there are about 50 million houses.

If houses are painted every 10 years, on average (notice how we deftly make that number easy to work with), then there are 5 million houses painted every year. Assuming that one gallon of paint covers 100 square feet of wall, and that the average house has 2000 square feet of wall to cover, then each house needs 20 gallons of paint. So 100 million gallons of paint are sold per year (5 million houses x 20 gallons). (Note: If you want to be fancy, you can ask your interviewer whether you should include inner walls as well!) If 80 percent of all houses are white, then 80 million gallons of white housepaint are sold each year. (Don't forget that last step!)~THE "START SMALL" APPROACH: You could also start small, and take a town of 27,000 (about one ten thousandth of the population). If you use the same assumption that half the town lives in houses in groups of three, then there are 4,500 houses, plus another 10 percent, then there are really 5,000 houses to worry about. Painted every 10 years, 500 houses are being painted in any given year. If each house has 2,000 square feet of wall, and each gallon of paint covers 100 square feet, then each house needs 20 gallons - and so 10,000 gallons of housepaint are sold each year in your typical town. Perhaps 8,000 of those are white. Multiply by 10,000 - you have 80 million gallons.

Your interviewer may then ask you how you would actually get that number, on the job, if necessary. Use your creativity - contacting major paint producers would be smart, putting in a call to HUD?s statistics arm could help, or even conducting a small sample of the second calculation in a few representative towns is possible.