Probability: Living with the Odds

Discussion Paragraph 7C

1 web
39. Lotteries
40. The Morality of Gambling
1 world
41. Law of Large Numbers
42. Personal Law of Large
Numbers
43. The Gambler’s Fallacy

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Unit 7D

Assessing Risk

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 7-D

Risk and Travel

Is driving getting safer?

52,600 deaths
1970:  4.8 10 8 death per mile
1.110 miles
12

37,300 deaths 8
2008:  1.3  10 death per mile
2.9 10 miles
12

Copyright © 2011 Pearson Education, Inc. Slide 7-4

Is Driving Getting Safer
CN (1)
 The last graphic shows the number of automobile
fatalities and the total number of miles driven
(among all Americans) per year from 1970-2008.
In terms of death rate per mile driven, compare
1970 (approx. 52,600 deaths and 1.1 million miles
driven) with 2008 (approx. 37,300 deaths and 2.9
trillion miles driven).

 1. Comment on how the risk of driving has

changed.

Copyright © 2011 Pearson Education, Inc. Slide 7-5

Which is Safer: Flying or Driving?
CN (2a-b)
 For the period 1989-2008, the average number of
deaths in commercial airplane accidents in the US
was roughly 60 per year. (The actual number
varied significantly from year to year.) As of 2008,
airplane passengers in the US traveled a total of
about 8 billion miles per year.

 a. Use these numbers to calculate the death rate

per mile of air travel.
 b. Compare the risk of flying to the risk of driving.
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 7-D

Vital Statistics
What is the risk per person for stroke?

137,199 deaths
 0.00046
300, 000, 000 people
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Interpreting Vital Statistics
CN (3)
 Use the table from the last slide:

 3. Assuming a US population of 300 million, find

and compare the risks per person and per
100,000 people for pneumonia/influenza and
cancer.

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 7-D

Life Expectancy
Life expectancy is the number of years a person
with a given age today can expect to live on average.

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 7-D
Life Expectancies
CN (4)
 Use the Figure from the last slide.

 Find the life expectancies of a 20 year old person

and a 60 year old person.

 4. Are the numbers consistent? Explain.

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 7-D
Case Study
CN (5a-c)
 SS benefits are paid from a combination of taxes collected from today’s wage earners and the SS
Trust Fund.
 Because of all the change, the number of people who will collect is expected to be much larger.
 One challenge of SS is finding a way to have enough to pay benefits for future retirees.
 Current projections – unable to pay after 2037.
 SS has proposed ways to solve problem:
 Change the amount of benefits paid
 Increase SS tax rate
 Change retirement age
 Partially or fully privatizing the SS program
 These proposals based on assumptions about future life expectancy.
 SS officials have assumed that life expectancy at birth will rise only slightly during this century.
 For example, projections assume American women will not reach 82 until 2033 – but women in
France have already achieved this.

 a. Does it really seem likely that it will take until 2033 for the US to reach the life expectancies that
are already found in many other nations?
 b. If SS projections are underestimating future changes in ages, are the financial problems far worse
than policy makers are banking on?
 c. Overall do you think large increases in life expectancy will be good or bad for society?

Slide 7-11
 7-D
Quick Quiz
CN (6)

 6. Please answer the 10 quick quiz multiple

choice questions on p. 454.

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 7-D
Homework 7D

 Discussion Paragraph 7C
 Class Notes 1-6
 p.455:1-8
 1 web
 32. Cancer vs. Heart Disease
 33. Travel Safety
 34. Life Expectancy
 1 world
 35. Travel Safety
 36. Vital Statistics
 37. Life Expectancies
Copyright © 2011 Pearson Education, Inc. Slide 7-13