risk

The evaluation of risk underlies most decisions we make about our own behavior.  The problem is that we have become used to thinking of personal risk in the manner of statisticians, medical researchers, insurance agents and the like.  Why is this a problem?  Because it is an upside down perspective. It intentionally ignores individual differences in favor of measurable statistical trends.

Now if you are an insurance company, for example, this is appropriate.  It makes no difference what the actual risk is that a particular insured driver will have an accident.  All that matters is that the total pool of insured drivers pays more in premiums than it receives in claims.

Yet we are accustomed to acting as if these statistical trends have strong predictive value for the  individual.  I argue that individual differences are likelier to predict individual risk than the arbitrary statistical category into which the individual in placed. In other words, statistical categories are far too broad to apply to individual cases.

Consider 4 individuals, ages 18, 19, 50 and 51.  For the sake of argument let's assume that the statistical likelihood of younger drivers to have accidents is twice as high as older drivers.  In a sample size of 4 however, it is likely that individual differences in driving skill will override the age based predictors.  A statistician would say that the sample size is too small.  That is to say, not large enough to MASK individual differences.

I prefer to understand and develop my unique abilities and apply that to my risk assessments. I believe most conventional wisdom encourages the opposite.

commencement

I realized some years ago that I spend an inordinate amount of time thinking. Specifically, I tend to question rules and commonly accepted truths. Certain core topics have persisted long enough that I would like to capture them in some more coherent, complete and persistent form than provocative dinner conversation.