Theoretically, wealthier people should buy less insurance, and should self-insure through saving instead, as insurance entails monitoring costs. Here, we use administrative data for 63,000 individuals and, contrary to theory, find that the wealthier have better life and property insurance coverage. Wealth-related differences in background risk, legal risk, liquidity constraints, financial literacy, and pricing explain only a small fraction of the positive wealth-insurance correlation. This puzzling correlation persists in individual fixed-effects models estimated using 2,500,000 person-month observations. The fact that the less wealthy have less coverage, though intuitively they benefit more from insurance, might increase financial health disparities among households.
Since that experiment, have you seen this phenomenon replicated in the real world?
Every time I see a Tesla accident. Especially the earlier ones. I was like, “Yep, there it is.” People are trusting these systems too much. And I remember after the very first one, what did they do? They were like, now you’re required to hold the steering wheel for something like five-second increments. If you don’t have your hand on the wheel, the system will deactivate.
But, you know, they never came and talked to me or my group, because that’s not going to work. And why that doesn’t work is because it’s very easy to game the system. If you’re looking at your cell phone and then you hear the beep, you just put your hand up, right? It’s subconscious. You’re still not paying attention. And it’s because you think the system’s okay and that you can still do whatever it was you were doing—reading a book, watching TV, or looking at your phone. So it doesn’t work because they did not increase the level of risk or uncertainty, or disbelief, or mistrust. They didn’t increase that enough for someone to re-engage.
Colleges face an increasingly complex and unpredictable array of challenges — abuse, harassment, assault, police misconduct, accidents, health and environmental hazards, fiduciary wrongdoing, the pandemic — that are making it more difficult to calculate risk and insure against it.
That’s a big part of why annual insurance premiums have gone up by double digits in recent years. John McLaughlin, senior managing director of the higher-education practice at Gallagher, an insurance brokerage and risk-management and consulting firm, says those increases range between an average of 10 and 35 percent across an institution’s insurance portfolio.
But what’s striking is that just behind enrollment on colleges’ list of worries are two areas that are not directly related to Covid: data security and Title IX. That’s according to an annual survey by United Educators, which provides liability insurance and risk-management services for its member colleges and schools. The survey was conducted from May 2019 through September 2020, as the coronavirus crisis unfolded, and 480 United Educators member institutions responded.
A tale of two theories. After the pandemic first broke out in December 2019, Chinese authorities reported that many cases had occurred in the wet market — a place selling wild animals for meat — in Wuhan. This reminded experts of the SARS1 epidemic of 2002, in which a bat virus had spread first to civets, an animal sold in wet markets, and from civets to people. A similar bat virus caused a second epidemic, known as MERS, in 2012. This time the intermediary host animal was camels.
Contrary to the letter writers’ assertion, the idea that the virus might have escaped from a lab invoked accident, not conspiracy. It surely needed to be explored, not rejected out of hand. A defining mark of good scientists is that they go to great pains to distinguish between what they know and what they don’t know. By this criterion, the signatories of the Lancet letter were behaving as poor scientists: They were assuring the public of facts they could not know for sure were true.
One of the very few establishment scientists to have questioned the virologists’ absolute rejection of lab escape is Richard Ebright, who has long warned against the dangers of gain-of-function research. Another is David A. Relman of Stanford University. “Even though strong opinions abound, none of these scenarios can be confidently ruled in or ruled out with currently available facts,” he wrote. Kudos too to Robert Redfield, former director of the Centers for Disease Control and Prevention, who told CNN on March 26, 2021 that the “most likely” cause of the epidemic was “from a laboratory,” because he doubted that a bat virus could become an extreme human pathogen overnight, without taking time to evolve, as seemed to be the case with SARS2.
Author(s): Nicholas Wade
Publication Date: 5 May 2021
Publication Site: Bulletin of the Atomic Scientists
The article, in any case, doesn’t claim that 180,000 people could have been saved by more robust public-health interventions in early 2020 but that those deaths are mostly the result of Americans’ poor health. That the U.S. death rate, even so, is lower than that of the U.K. and Italy and nearly equal to that of France — all G7 nations — rather complicates Mr. Lewis’s breezy thesis.
It is amazing to me that intelligent people in 2021 can survey the past year and conclude that some alternative set of non-pharmaceutical interventions would have made an appreciable difference in the spread of this magnificently resilient virus. But many such people do believe that, including the author of this book and its ostensible heroes. One of those heroes, an accomplished hospital administrator named Carter Mecher, drew up a national pandemic response plan for the George W. Bush administration. The key to stopping dangerous pathogens, he came to believe as he studied pandemic modeling, was closing schools.
Here is a point that Mr. Lewis’s heroes show no awareness of grasping: that the United States is a big unruly country in which people are accustomed to going where they please and don’t care for government authorities telling them what to do based on poorly understood “data.” One of the Wolverines, a public-health official in Santa Barbara County named Charity Dean, appears to believe that any sign of a dangerous contagion permits health authorities to assume dictatorial powers. She tells Mr. Lewis that in early 2020 California should have closed its borders “until it figured out exactly how much virus was circulating, and where” and that the U.S. should follow Thailand’s example and require “anyone entering the country to wear a GPS wristband” and so enable the authorities to know who’s disobeying quarantine rules.
I haven’t said this explicitly in a while, so it’s worth saying it again: If you are not vaccinated, the current level of risk out there is much higher than the graphs and charts naively imply. On top of that, the cost of getting Covid now is much higher than it was earlier, both because the new dominant strain is deadlier, and also because the main benefit of getting infected – that you can’t get infected again – no longer matters much since you’ll have vaccine access soon either way and things aren’t so bad out there that prevention is hopeless. You won’t even be able to skip the vaccine, due to people requiring it (plus it’s a good idea anyway, since the cost is trivial).
Not only have we vaccinated over a quarter of the population, and given one dose to over a third of the population, we’ve done so with an emphasis on those most at risk.
That means that if you’re in the remaining two thirds, not only is your risk a third higher than it looks (e.g. almost all the infections will happen to unvaccinated people) but also the risk of death is more than double what it appears, as those at risk have largely been vaccinated early.
In a white paper for The Pew Charitable Trusts, Eric Scorsone and Natalie Pruett of the Michigan State University Extension’s Michigan Center for Local Government Finance & Policy assessed local government early warning systems through case studies in Colorado, Louisiana, Ohio, and Pennsylvania. Each of these states applies various financial ratios—an approach known as ratio analysis—and other indicators to identify signs of local fiscal distress. Ratio analysis uses fractions that capture financial or economic activity within a locality—such as total expenditures over total revenues—to measure solvency, the ability to pay debts and liabilities over the short or long term. Ultimately, the authors determined that there isn’t one optimal system and instead offer several recommendations for states to build or improve their early warning systems.
The authors present detailed descriptions of the four states’ systems and analyze trade-offs and implications of the indicators employed to measure different types of solvency. They offer a variety of recommendations for states to consider, including use of indicators for four types of solvency:
On Jan. 27, 1986, Allan McDonald stood on the cusp of history.
McDonald directed the booster rocket project at NASA contractor Morton Thiokol. He was responsible for the two massive rockets, filled with explosive fuel, that lifted space shuttles skyward. He was at the Kennedy Space Center in Florida for the launch of the Challenger “to approve or disapprove a launch if something came up,” he told me in 2016, 30 years after Challenger exploded.
His job was to sign and submit an official form. Sign the form, he believed, and he’d risk the lives of the seven astronautsset to board the spacecraft the next morning. Refuse to sign, and he’d risk his job, his career and the good life he’d built for his wife and four children.
“And I made the smartest decision I ever made in my lifetime,” McDonald told me. “I refused to sign it. I just thought we were taking risks we shouldn’t be taking.”
Overall, the typical pension fund is now expected to return approximately 6% annually over the next 20 years, compared with 6.4% pre-pandemic (Figure 4). This change in outlook is consistent with the reduction in the median long-term return found by a recent survey of pension investment consultants13 and aligns with revisions for public pension return expectations published by S&P Global.14
The unwinding has rippled to holders of the Credit Suisse funds, German municipalities that deposited money with Greensill’s bank, and a high-profile duo of venture-capital investors.
Greensill specialized in supply-chain finance, a type of short-term cash advance to companies to stretch out the time they have to pay their bills. The firm was once worth $4 billion based on investments from SoftBank Group Corp.’s Vision Fund. The collapse marks a high-profile blow for the mammoth Japanese investor.
Five key fallacies and pitfalls have affected public-health messaging, as well as media coverage, and have played an outsize role in derailing an effective pandemic response. These problems were deepened by the ways that we—the public—developed to cope with a dreadful situation under great uncertainty. And now, even as vaccines offer brilliant hope, and even though, at least in the United States, we no longer have to deal with the problem of a misinformer in chief, some officials and media outlets are repeating many of the same mistakes in handling the vaccine rollout.
Amidst all the mistrust and the scolding, a crucial public-health concept fell by the wayside. Harm reduction is the recognition that if there is an unmet and yet crucial human need, we cannot simply wish it away; we need to advise people on how to do what they seek to do more safely. Risk can never be completely eliminated; life requires more than futile attempts to bring risk down to zero. Pretending we can will away complexities and trade-offs with absolutism is counterproductive. Consider abstinence-only education: Not letting teenagers know about ways to have safer sex results in more of them having sex with no protections.