Friday, February 17, 2017

Comparing the incidence of terrorism with that of common accidents is an incompetent and irresponsible use of statistics

From Stop Telling Me How Dangerous My Bathtub Is by Justin Fox.

Fox is dealing with a common non sequitur used by the press to impugn those who fear terrorism, i.e. the trope that more people die from slips and falls in the bathroom than from terrorist attacks. Fox explores why it is a non sequitur.
First is that terrorism is designed to, you know, sow terror. As Ganesh writes,
most people can intuit the difference between domestic misfortune and political violence. The latter is an assault on the system: the rules and institutions that distinguish society from the state of nature. Bathroom deaths could multiply by 50 without a threat to civil order. The incidence of terror could not.
Second is that ladders, stairs and bathtubs are undeniably useful. Terrorists, not so much. (I’ll get back to usefulness in a moment.)
Finally, comparing the incidence of terrorism with that of common accidents is an incompetent and irresponsible use of statistics. Household accidents are lots and lots of small, unrelated events. As a result, while individual accidents can’t be predicted, the overall risk is easy to quantify and is pretty stable from year to year.

Terrorism is different. There are small incidents, but there are also huge ones in which hundreds or thousands of people die. It’s a fat-tailed distribution, in which outliers are really important. It also isn’t stable: Five or 10 or even 50 years of data isn’t necessarily enough to allow one to predict with confidence what’s going to happen next year. It’s a little like housing prices -- the fact that they hadn’t declined on the national level for more than 50 years before 2006 didn’t mean they couldn’t decline. Meanwhile, the widespread belief that they wouldn’t decline made the housing collapse more likely and more costly.

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