Year In Review

A "Year in Review" column, from my friend David Collum.

Piling up Risk Like Tetris

Odious debt.  He said "odious."

News vs. Risk Analysis

To sell stuff and get attention, you have to make people afraid.  Like this:  Parents-share-bed-with-babies-despite-risks-survey-says we will all die soon!  News at 11!

The actual data.  Click for an even less frightening image.  The "risk" has fallen, dramatically.

There is actually an AMA "Child Care Providers' Guide to 'Safe Sleep'".  I'm pretty sure I would sleep better if the medical profession would stop trying to make extra money by frightening people with half-truths and made up dangers.

Nod to SdM.

Risk is not volatility

Interesting post by Gene Callahan.  He is careful to note that defining "risk" as variance is not nonsense; it's just not what people mean when they say "risk."

ATSRTWT

We Fear Unlikely Things, But Constantly Do Dangerous Things

The chances of a school being a target of gun violence are negligible, but we have marches and mass pestering about a non-existent threat.

But people take showers and drive cars every day.  Now, THOSE things are dangerous.

And Jared Diamond, to his credit, recognizes this.

It's fun to yammer about guns, precisely because it is a trivial risk.  We can show how much we care by being irrational.

Bike Helmet Follies

"One common denominator of successful bike programs around the world — from Paris to Barcelona to Guangzhou — is that almost no one wears a helmet, and there is no pressure to do so. In the United States the notion that bike helmets promote health and safety by preventing head injuries is taken as pretty near God’s truth. Un-helmeted cyclists are regarded as irresponsible, like people who smoke. Cities are aggressive in helmet promotion...'Pushing helmets really kills cycling and bike-sharing in particular because it promotes a sense of danger that just isn’t justified — in fact, cycling has many health benefits,' says Piet de Jong, a professor in the department of applied finance and actuarial studies at Macquarie University in Sydney. He studied the issue with mathematical modeling, and concludes that the benefits may outweigh the risks by 20 to 1. He adds: 'Statistically, if we wear helmets for cycling, maybe we should wear helmets when we climb ladders or get into a bath, because there are lots more injuries during those activities.'" [Elisabeth Rosenthal, NYT op-ed]

I like the comments part of the article.  The idiot parade is in full swing.  The claim is not that (1) wearing a helmet is a bad idea, or that (2) wearing a helmet should be illegal.  The claim is that the statistical risks are in line with wearing a helmet when you brush your teeth.  People slip and fall in the bathroom, sometimes, and hit their heads.  Not very often.  And the survivable accidents on bikes where a helmet matters are statistically rare.

Now I fully expect some goofball to comment and say, "A helmet saved the life of my cousin's stepdaughter!"  Yes.  And your dad should have worn a condom.

(Nod to Kevin Lewis, who likely wears a helmet when he brushes his teeth)

You Had Better Go Back to Your Bars, Your Temples...

Beauty Queens and Battling Knights: Risk Taking and Attractiveness in Chess

Anna Dreber, Christer Gerdes & Patrik Gränsmark
Stockholm University Working Paper, November 2010

Abstract: We explore the relationship between attractiveness and risk taking in chess. We use a large international panel dataset on chess competitions which includes a control for the players’ skill in chess. This data is combined with results from a survey on an online labor market where participants were asked to rate the photos of 626 expert chess players according to attractiveness. Our results suggest that male chess players choose significantly riskier strategies when playing against an attractive female opponent, even though this does not improve their performance. Women’s strategies are not affected by the attractiveness of the opponent.

Which of course made me think of this. Darn women. Darned risky moves.

Hang up your cell phone, and drive a Toyota

People are going nuts over how dangerous Toyotas are.

And I suppose that it would be a bad experience to have your accelerator stuck. ("If your accelerator gets stuck for more than four hours, seek medical attention...")

But as Prof. Fischbeck points out, it is FAR (FAAAAAR) more dangerous to go for a walk, or to speak ("Hey, gurl! Watchoodoin'? Nothing, I'm jes drivin'...")

One size fits all

We pretty much all know that the real answer to questions of the sort "why does X occur"? is "to get the girl".

You know what I mean right? "why do birds grow elaborate feathers?", "why do rams butt heads at 30 mph?" Why do boys play football?", "why do bloggers blog?".


Now, LeBron informs us that this simple, powerful answer also applies to explaining our current global imbalances, viz:

Q: Why do the Chinese save so much?

A: To get the girl!

Meet the new Raj, Same as the old Raj?

In a new NBER working paper (ungated version here) Alfaro and Chari ask the question, "India Transformed?" and their answer goes something like this:

Using firm-level data this paper analyzes the transformation of India’s economic structure following the implementation of economic reforms. The focus of the study is on publicly-listed and unlisted firms in manufacturing and services industries. Detailed balance sheet and ownership information permit an investigation of a range of variables. We analyze firm characteristics shown by industry before and after liberalization and investigate how industrial concentration, number, and size of firms evolved between 1988 and 2005. We find great dynamism displayed by foreign and private firms as reflected in the growth in their numbers, assets, sales and profits. Yet, closer scrutiny reveals no dramatic transformation in the wake of liberalization. The story rather is one of an economy still dominated by the incumbents (state-owned firms) and to a lesser extent, traditional private firms (firms incorporated before 1985). Sectors dominated by state-owned and traditional private firms before 1988-1990, with assets, sales and profits representing shares higher than 50%, generally remained so in 2005. The exception to this broad pattern is the growing importance of new private firms in the services sector. Rates of return also have remained stable over time and show low dispersion across sectors and across ownership groups within sectors.

I think this post's title is a pithier abstract, but then I don't work at the Harvard B-School, do I?

We Get Letters

This from R.L., on the recent article in the New Yorker...., by Malcolm Gladwell.

Build a better helmet, reduce the number of concussions? Or do it like rugby and drop the helmet all together?

Excerpt from article: "But if C.T.E. is really about lots of little hits, what can be done about it? Turley says that it’s impossible for an offensive lineman to do his job without “using his head.” The position calls for the player to begin in a crouch and then collide with the opposing lineman when the ball is snapped. Helmet-to-helmet contact is inevitable. Nowinski, who played football for Harvard, says that “proper” tackling technique is supposed to involve a player driving into his opponent with his shoulder. “The problem,” he says, “is that, if you’re a defender and you’re trying to tackle someone and you decide to pick a side, you’re giving the other guy a way to go—and people will start running around you.” Would better helmets help? Perhaps. And there have been better models introduced that absorb more of the shock from a hit. But, Nowinski says, the better helmets have become—and the more invulnerable they have made the player seem—the more athletes have been inclined to play recklessly."

Read on and a UNC researcher Gladwell cites suggests eliminating kickoffs because a disproportionate number of head injuries occur during kickoffs.

Even better is the discussion of "gameness" in fighting dogs... And football players- and the culture of never missing practice.

That does remind me of the "Tullock air bag." Gordon famously suggested that the way to make cars safer was to put a retractable dagger in the steering column. The dagger shoots out and locks in the case of an accident. Same reasoning, with an empirical basis, for Peltzman.
(Bob Lawson found that cartoon, bless him)
Russ Sobel showed it worked for NASCAR; why not for NFL? Get rid of the helmets.