Somewhat Relevant Investment Observation of the Day

More people die each year from pig attacks or coconuts falling on their heads - or even getting their head stuck in an electric car door window - than die of shark attacks!

From James Montier, in the book Just One Thing. 

In a chapter on biases, Montier is describing the emotional impact on the processing of information.  A large number of people believe shark attacks kill more people each year than lightning strikes when in fact death by lightning is 30 times more likely than death by shark.  However, because a shark attack is a more terrifying event, people put more weight on the likelihood of a shark attack than a lightning strike.

Comments

[bastiat]

Out of curiosity, I wonder what the stats would say if you control for the amount of exposure to each environment? Most people do not spend more than a few hours in the ocean in their entire life. The amount of time spent under the sky would be a bit higher.

There was a book about exaggerated risks published a few years back,"The Culture of Fear," by Barry Glassner. Fairly well done, but in the conclusion of the book the author falls prey to substituting one exaggeration for another.

[ault]

Possibly a case of garbage statistics. While I was in Recife, Brazil in 2003, the local paper carried a story of two recent fatal shark attacks. As I've always been told that these are rare, I discussed it with several locals. They all averred that shark attacks were a monthly if not weekly event. This doesn't tally with 'confirmed shark attack statistics' for the region.

Now perhaps there is rampant under-reporting of pig attacks and lightning strikes, but there's probably a lesson here about accepting available statistics at face value.

There's also probably a worthwhile PhD thesis or two out there on distance of threat. My Mom in NY is far more worried about earthquakes than any of my CA friends. My theory is, if you have to live with an unlikely yet serious threat, you are far more likely to discount it than those who are not as directly threatened by it.