Dec 17 2008
Buckle Up
<rant>
I’ve been extremely annoyed by people not wearing their seat belts and I think it is worth a blog post now.
IF YOU REFUSE TO WEAR A SEAT BELT, YOU ARE A FUNKEN IDIOT AND YOU DESERVE TO DIE!
Oftentimes the reason for not wearing a seat belt is that the person is too lazy to buckle up. There is a cost analysis that goes something like this…
C1 = the cost of putting on a seat belt (always the same cost)
C2 = the expected cost (some weighted average) of NOT putting on a seat belt if an accident occurs
C3 = the expected cost (some weighted average) of wearing a seat belt if an accident occurs
p = the probability of getting into a car accident
Cost(function of p without seat belt) = C2*p
Cost(function of p with seat belt) = C1 + C3*p
People figure that they do not need to wear a seat belt if…
- p is sufficiently small
- C3 is not much less than C2
I do not know how low p is, but I will tell you this: p IS NEVER LOW ENOUGH. You have a 1/75 lifetime probability of dying in a car accident. Hmm, I wonder if your probability of dying in a car accident can be cut in half very easily…
I also do not know how much larger C2 is compared to C3, but 63% of people who die in car accidents were not wearing a seat belt.
The bottom line is this…if you do not wear a seat belt, you are a fool!
One of my regular blog readers is going to read this post in the coming days and he will know this post is partially directed to him.
Message to that guy:
1. Do you find it funny that the other person in the car who was not wearing a seat belt wants to be an actuary? That’s pretty har har funny, isn’t it?
2. Do you even remember last Friday when you heard that someone you kind of know was in a low speed head on collision with another car, and that guy, and another guy in the car had to be sent to the hospital while the five occupants in the other car were fine? There are a lot of unknowns, but there’s my guess. NO SEATBELTS!
And the both of you in the back seat even debate the cost function of wearing a seat belt rather than shut your mouths and buckle up. Amazing idiocy.
</rant>
Speculative observations…
1. Any good actuary would always buckle up. The actuaries look at the numbers. They are not stupid.
2. Any good trader would always buckle up. Why? Because good traders understand the concept of risk.
3. People who go to Vegas probably do not buckle up.
Another thing…
Do you know what the difference is between a gambler and a good trader? The gambler looks at the potential upside. The good trader looks at the potential downside for a given upside. When it comes to seat belts, the potential downside of not wearing a seat belt is far too great.