Insurance and safety after September 11, 2001: Coming to grips with the costs and threats of terrorism

This chapter, originally written as a consequence of the terrorist attacks of September 11, 2001, provides an elementary, everyday introduction to the concepts of risk and insurance. Conceptually, risk has two dimensions: a potential loss, and the chance of that loss being realized. People can, however, transfer risk to insurance companies against the payment of so-called premiums. In practice, however, one needs accurate assessments of both losses and probabilities to judge whether premiums are appropriate. For many risks, this poses little problem (e.g., life insurance); however, it is difficult to assess risks of many other kinds of events such as acts of terrorism. It is emphasized, that through evolution and learning, people are able to handle many of the common risks that they face in life. But when people lack experience (e.g., new technologies, threats of terrorism), risk can only be assessed through imagination. Not surprisingly, insurance companies demand high prices when risks are poorly understood. In particular, the cost of insurance against possible acts of terrorism soared after September 11. How should people approach risk after the events of that day? Clearly, the world needs to protect itself from the acts of terrorists and other disturbed individuals. However, it is also important to address the root causes of such antisocial movements. It is, therefore, suggested that programs addressed at combatting ignorance, prejudice, and social inequalities may be more effective premiums for reducing the risk of terrosrtism than has been recognized to date.Decision making, risk, insurance, terrorism, September 11

The challenge of representative design in psychology and economics

The demands of representative design, as formulated by Egon Brunswik (1956), set a high methodological standard. Both experimental participants and the situations with which they are faced should be representative of the populations to which researchers claim to generalize results. Failure to observe the latter has led to notable experimental failures in psychology from which economics could learn. It also raises questions about the meaning of testing economic theories in “abstract” environments. Logically, abstract tests can only be generalized to “abstract realities” and these may or may not have anything to do with the “empirical realities” experienced by economic actors.Experiments, representative design, sampling, Leex

Speaking Truth To Power: Why Energy Distribution, More Than Generation, Is Africa's Poverty Reduction Challenge

This paper revisits the roles that energy plays in poverty reduction. First, while energy does not reduce poverty itself, it delivers energy services. These services can improve poor people's welfare both directly by enhancing their own productivity, education and health, and indirectly by changing the economy around them. The paper provides a simplified framework for thinking about these energy services, and then reviews the literature on their importance to poverty reduction. From this framework, we draw a series of three important conclusions about energy priorities and their implications for poverty reduction and development.Tackling energy poverty will have less to do with ambitious expansion of electricity capacity, and more to do with ambitious distribution of energy services to poor people.Expansion in centralized power generation serves industry, the services sector and already-connected households, before it serves the poor.Distributed, clean energy interventions are best suited to tackling energy poverty -- and poverty more generally

Stop and Frisk: The Human Impact

The New York City Police Department's (NYPD's) aggressive stop-and-frisk practices are having a profound effect on individuals, groups and communities across the city. This report documents some of the human stories behind the staggering statistics and sheds new light on the breadth of impact this policy is having on individuals and groups, in neighborhoods, and citywide.The NYPD stop-and-frisk program affects thousands of people every day in New York City and it is widely acknowledged that an overwhelming majority of those people are Black or Latino. This report shows that many are also members of a range of other communities that are experiencing devastating impact from this program, including LGBTQ/GNC people, non-citizens, homeless people, religious minorities, low-income people, residents of certain neighborhoods and youth. Residents of some New York City neighborhoods describe a police presence so pervasive and hostile that they feel like they are living in a state of siege

The net benefits to employers’ investments in apprenticeships : case study evidence from the UK

In a flexible labour market where people can move relatively easily between jobs and employers, there can be disincentives to train. Employers will be reluctant to train if they are, other things being equal, unsure about the extent to which they will be able to recoup their training costs. In the UK, public policy is committed to increasing the number of people completing apprenticeships in recognition of the benefits this form of training confers on both employers and individual apprentices. Considerable efforts are being made by the public agencies responsible for apprenticeships to persuade employers to participate in this form of training by persuading them of the benefits of doing so. Based on a limited number of employer case studies, this paper outlines the net costs borne by employers in training apprentices and the period over which these costs are recouped by the employer. It demonstrates that employers are able to recoup their costs over one to two years in many instances

Note on a reformulation of the strong cosmic censor conjceture based on computability

In this letter we provide a reformulation of the strong cosmic censor conjecture taking into account recent results on Malament--Hogarth space-times. We claim that the strong version of the cosmic censor conjecture can be formulated by postulating that a physically relevant space-time is either globally hyperbolic or possesses the Malament--Hogarth property. But it is known that a Malament--Hogarth space-time in principle is capable for performing non-Turing computations such as checking consistency of ZFC set theory. In this way we get an intimate conjectured link between the cosmic censorship scenario and computability theory.Comment: LaTeX, 9 pages, 1 eps-figure; minor typos corrected and journal reference adde

Determinants of linear judgment: A meta-analysis of lens model studies

The mathematical representation of Brunswik’s lens model has been used extensively to study human judgment and provides a unique opportunity to conduct a meta-analysis of studies that covers roughly five decades. Specifically, we analyze statistics of the “lens model equation” (Tucker, 1964) associated with 259 different task environments obtained from 78 papers. In short, we find – on average – fairly high levels of judgmental achievement and note that people can achieve similar levels of cognitive performance in both noisy and predictable environments. Although overall performance varies little between laboratory and field studies, both differ in terms of components of performance and types of environments (numbers of cues and redundancy). An analysis of learning studies reveals that the most effective form of feedback is information about the task. We also analyze empirically when bootstrapping is more likely to occur. We conclude by indicating shortcomings of the kinds of studies conducted to date, limitations in the lens model methodology, and possibilities for future research.Judgment, lens model, linear models, learning, bootstrapping

Take-the-best and other simple strategies: Why and when they work 'well' in binary choice

The effectiveness of decision rules depends on characteristics of both rules and environments. A theoretical analysis of environments specifies the relative predictive accuracies of the lexicographic rule 'take-the-best' (TTB) and other simple strategies for binary choice. We identify three factors: how the environment weights variables; characteristics of choice sets; and error. For cases involving from three to five binary cues, TTB is effective across many environments. However, hybrids of equal weights (EW) and TTB models are more effective as environments become more compensatory. In the presence of error, TTB and similar models do not predict much better than a naïve model that exploits dominance. We emphasize psychological implications and the need for more complete theories of the environment that include the role of error.Decision making, bounded rationality, lexicographic rules, Leex

Experiencing simulated outcomes

Whereas much literature has documented difficulties in making probabilistic inferences, it has also emphasized the importance of task characteristics in determining judgmental accuracy. Noting that people exhibit remarkable efficiency in encoding frequency information sequentially, we construct tasks that exploit this ability by requiring people to experience the outcomes of sequentially simulated data. We report two experiments. The first involved seven well-known probabilistic inference tasks. Participants differed in statistical sophistication and answered with and without experience obtained through sequentially simulated outcomes in a design that permitted both between- and within-subject analyses. The second experiment involved interpreting the outcomes of a regression analysis when making inferences for investment decisions. In both experiments, even the statistically naïve make accurate probabilistic inferences after experiencing sequentially simulated outcomes and many prefer this presentation format. We conclude by discussing theoretical and practical implications.probabilistic reasoning; natural frequencies; experiential sampling; simulation., leex