Agenda

1
Agenda

• Buy materials
• Go over syllabus
• Preview course
• Take photographs

2
Lecture 0

• Introduction

3
Statistical questions

• What is typical?
• How much variety is there?
• Who exactly are we talking about?
• How certain are we?
• What should we compare this to?

4
Proof by example

• Proof by example
• Often used in journalism and politics
• People are trying to sue McDonalds for making
  consumers fat.
• chain restaurants must be protected from
  frivolous lawsuits
• Physician in Las Vegas closed his obstetric
  practice because of high malpractice premiums
• Malpractice verdicts and insurance rates must be
  capped
• I missed my exit
• The road sign should be moved.

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1. What is typical?

• Response to proof by example
• Get beyond the single case to evaluate whether
  theres a broader problem.
• What proportion? Whats the average?
• Restaurant examples
• What proportion of consumer tort cases involve
  obesity?
• What proportion of those cases go to trial?
• Whats the average verdict?
• Medical examples
• Whats the average malpractice insurance premium?
• What proportion of medical practices close each
  year?
• What proportion close because of insurance?
• What proportion of expectant mothers cant find
  an obstetrician?

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Proof by average

• The average temperature in San Antonio is 68.6o
• The average malpractice premium is about 10K
  after taxes
• Only .05 of state lawsuits end in punitive
  damages

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2. How much variety is there?

• Response to proof by average
• Get beyond the average
• How extreme can it get?
• How often does it get that extreme?
• The average temperature in San Antonio is 68.6o
• But summer days often go over 100o
• The average malpractice premium is about 10K
  after taxes
• but its twice that in obstetrics and surgical
  specialties
• and higher in certain counties
• or if you have a history of malpractice
• Only .05 of state lawsuits end in punitive
  damages
• but when damages are awarded they average over 1
  million

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Everybodys doing it

• Presidential election, 1936
• Literary Digest poll
• Got 10 million names from lists of car and phone
  owners
• Mailed 10 million questionnaires
• Got 2.3 million responses
• Results 57 favor Landon (R), 43 favor
  Roosevelt (D)
• Election result

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3. Who exactly are we talking about?

• Response to everybodys doing it.
• Who exactly was the Literary Digest talking
  about?
• Car and phone owners
• The wealthy, in 1936
• Who should they have been talking about
• US voters
• a lot of them poor, especially in the Great
  Depression

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4. What should we compare this to?

• Answer to Is that a lot?
• Average malpractice premium is 10K
• What should we compare this to?
• Average physician salary 205,700
• after taxes and expenses
• including the expense of malpractice insurance
• McDonalds coffee case was settled for 600,000
• What should we compare this to?
• McDonalds coffee sales? gt 1 million / day

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5. How certain are we?

• 46 of US voters are leaning toward Kerry
• Margin of error /- 3
• Were certain about the 1000 voters we talked to,
  but not about the others
• Theres no significant difference between
  voting for Kerry and Bush
• Theres a difference, but were not sure which
  direction

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Overview of course