Monthly Archives: January 2013

Beware Life Insurance

Life insurance is bought more because it sounds like a good idea than because it is actually needed. In fact, most people who buy life insurance never actually get paid when they die:

Almost 85% of [US life insurance] term policies fail to end with a death claim; nearly 88% of universal life policies ultimately do not terminate with a death benefit claim.  In fact, 74% of term policies and 76% of universal life policies sold to seniors at age 65 never pay a claim. …

We document the following core facts about the U.S. life insurance industry, which has over $10 trillion of individual coverage in force …:

  •  A death benefit is not paid on most policies. For “term policies” that offer coverage over a fixed number of years, most are “lapsed” prior to the end of the term; a majority of permanent (e.g., “whole life”) policies are “surrendered” (i.e., lapsed and a cash value is paid) before death.
  • Insurers make substantial amounts of money on clients that lapse their policies and lose money on those that do not. Insurers, however, do not earn extra-ordinary profits. Rather, lapsing policyholders cross subsidize households who keep their coverage.
  • Real premiums decrease over time (i.e., policies are “front loaded”) rather than increasing with age in a manner more consistent with either actuarially fair pricing or optimal insurance in the presence of reclassification risk where new information about mortality risk is revealed.
  • As an industry, insurers lobby intensely to restrict the operations of secondary markets. In other markets (e.g., initial public offerings or certificates of deposit), the ability to resell helps support the demand for the primary offering. …

While consumers correctly account for mortality risk when buying life insurance, they fail to sufficiently weight the importance of background risks. … Since consumers do not anticipate the need to lapse, this front-loaded policy appears to be cheaper than a policy that is actuarially fair each period. … The introduction of a secondary market undermines this cross-subsidy by offering lapsing households better terms relative to surrendering. (more)

We cryonics patients are hopefully an exception – we really do need the money to pay for the cryonics treatment. More info on cheating insurance agents:

We construct a rich dataset describing individual insurance agents operating in Texas. We match licensing data with company affiliations and detailed sales practice complaint records from the state regulator. From the company affiliation data, we identify two types of experts: monitored agents from large, branded companies, and unmonitored agents working as independents. We fid that the odds of monitored experts from large, branded companies taking advantage of their customers are 21 to 98% greater than the odds for unmonitored independent experts. In a supplemental analysis, we use national sale practice complaints data to confirm our results. Finally, we find that more experienced agents are significantly more likely to mislead their customers. … Company agents may earn 50 to 70% of the gross commissions of their sales, depending on the type of insurance product. (more)

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Personal experiments: for the unusual?

I asked in what kind of world personal experimentation could seem worth it for me yet not already exhausted. Today I’ll look at one potential explanation, popular with commenters last time: I and my friends are weird in some way that causes to benefit more than usual from experimentation. Several of the suggestions below were seconded by commenters.

Robin makes a plausible suggestion in this realm: in general people do quite well by copying the right other people’s behavior in some kind of clever, intuitive, context specific way. Nerds are terrible at this though (either because they fail to copy at the outset, or because they can’t do the social interpretation necessary to correctly generalize). So they have the choice to copy other people badly, or try to reinvent a lot of things from scratch. So experimentation is much more useful for nerds. Coupled with the premise that I’m a nerd, this explains the observations and has some intuitive appeal.

If something like this is true, there seem to me to be traits beyond lack of copying skill that incline nerds toward working such things out from scratch. In general if you are already unusual on many axes, copying others on a particular one is less good, so you will have to figure things out for yourself more. Once you have determined to sleep in the daytime and practice radical honesty, the usual answers about how to improve your mood or attract a partner may not apply as well. Nerds are also more likely to have the quantitative skills to do experiments well. And nerds seem more unsettled by adherence to traditions handed to them without explanation or instructions.

These things might explain enthusiasm for explicit experimentation and innovation, but the reasons experimentation seems worth it didn’t make reference to enthusiasm. Non-nerds may copy one another fine, but there seem to be better things to do than copying. It could also be that experimentation is not worthwhile, and nerds just tend to over-rate it. But fits nicely into a category to be explored later: ‘I’m wrong’.

Another relevant way I and my friends might be weird is that we live so late in history, and in such a rich world. Perhaps it has only recently become cheap enough to track such experimentation usefully. This seems important for the more elaborate data-tracking kinds of experiments. But it seems like you can do a lot with a pen and paper, and maybe a calculator and a coin. Also, as Robin points out, there are more people to copy now, so the ‘experiment little’ path is also easier. Arguably, I say.

Another way I am strange is in being relatively young. Youth clearly makes experimentation more valuable. However I feel like it is valuable enough, and that the gains are soon enough, that I would want to do it if I were similar to myself apart from having thirty years less to live. It could be that older people are unlike me however, in that they have learned a lot more by experimentation when they were young. Is this so? It’s not clear to me.

None of these explanations seem that great. Are there other ways I’m weirdly good at benefitting from experimentation?

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Hail Scott Siskind

Scott Siskind gets it:

A democracy provides a Schelling point, … an option which might or might not be the best, but which is not too bad and which everyone agrees on in order to stop fighting. … In the six hundred fifty years between the Norman Conquest and the neutering of the English monarchy, Wikipedia lists about twenty revolts and civil wars. … In the three hundred years since the neutering of the English monarchy and the switch to a more Parliamentary system, there have been exactly zero. … Democracy doesn’t always perform optimally, but it always performs fairly, … and that is enough to prevent people from starting civil wars.

Academia is different. Its state resembles that of pre-democratic governments, when anyone could choose a side, claim it was legitimate, and then get into endless protracted fights with the partisans of other sides. If you believe ObamaCare will destroy the economy, you will have no trouble finding a prestigious academic who agrees with you. Then all you need to do is accuse the other academics of bias, or cherry-picking, or using the wrong statistical test, or any of the other ways to discredit scientists you don’t like. …

A democratic vote among the scientific establishment is insufficient to settle these topics. The most important problem is that it gives massive power to the people who determine who gets to be part of “the scientific establishment”. … So not having any Schelling point – being hopelessly confused about the legitimacy of academic ideas – sucks. But a straight democratic vote of academics would also suck and be potentially unfair.

Prediction markets avoid these problems. There is no question of who the experts are: anyone can invest in a prediction market. There’s no question of special interests taking it over; this just distributes free money to more honest investors. Not only do they escape real bias, but more importantly they escape perceived bias. It is breathtakingly beautiful how impossible it is to rail that a prediction market is the tool of the liberal media or whatever. …

Nate Silver might do better than a prediction market, I don’t know. But Nate Silver is not a Schelling point. Nobody chose him as Official Statistics Guy via a fair process. And if someone objected to his beliefs, they could accuse him of bias and he would have no recourse until it was too late. If a prediction market is almost as good as Nate, and it is also unbiased and impossible to accuse of bias, we have our Schelling point. …

Just as democracy made it harder to fight over leadership, prediction markets make it harder to fight over beliefs. We can still fight over values, of course – if you hate teenagers having sex, and I don’t care about it, we can debate that all day long. But if we want to know whether a certain law will raise the pregnancy rate, there will be only one correct answer, and it will only be a mouse-click away.

I think this would have more positive effects than anyone anticipates. If people took it seriously, not only would the gun control debate be over in an hour, but it would end on the objectively right side, whichever side that was. If single-payer would be better than Obamacare, we could implement single-payer and anyone who tried to make up horror stories about how it would destroy health care would be laughed out of the room. And once these issues have gone away, maybe we can reach the point where half the country stops hating the other half because of disagreements which are largely over factual issues. (more; HT Stephen Bachelor)

By the way, my futarchy paper will appear this year in Journal of Political Philosophy. This is very close to the final version.

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Social Norms Are Far

We see social norms as more relevant when predicting the average behavior of a group, relative to predicting an individual’s behavior:

In judgments of morally relevant behaviors, forecasters estimated that a randomly selected individual (e.g., a student) would act more selflessly (e.g., give to charity) than would the population from which the individual was drawn (e.g., the student body). … When considering how an individual will behave, people give weight to an individual-level force on behavior: what an individual’s moral conscience would lead one to do. When considering a population, forecasters give more emphasis to a group-level force on behavior: social norms and pressures. … Individuals were [also] forecast as more likely than populations to perform behaviors that emerge primarily because of an individual-level force—a person’s will—but not behaviors that are encouraged by social norms. (more)

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Morality as though it really mattered

A large share of the public, and even an outright majority of professional philosophers, claim to be ‘moral realists‘. Presumably, if this means anything, it means that there are objective rules out there that any being ought to follow and doing the ‘right thing’ is about more than just doing what you want.

Whatever surveys say, my impression is that almost nobody acts as though they were actually realists. If you really believed that there were objective rules that we should follow, that would make it crucial to work out what those rules actually were. If you failed to pick the right rules, you could spend your life doing things that were worthless, or maybe even evil. And if those are the rules that everyone necessarily ought to be following, nothing could be worse than failing to follow them. If most acts or consequences are not the best, as seems likely, then the chances of you stumbling on the right ones by chance are very low.

Does this imply that you should spend your entire life studying morality? Not exactly. If you became sufficiently confident about what was good, it would then be more valuable to go out and do that thing, rather than continue studying. On the other hand, it does imply a lot more effort than most people put into this question today. The number of ethicists with a public profile could be counted on one hand. Research on ethics, let alone meta-ethics, is largely ignored by the public and considered of ‘academic interest’, if that. To a realist, nothing could be further from the truth. It is impossible to go about forming other life plans confidently until you have worked out what is morally right!

Simple probing using questions well known to philosophers usually reveals a great deal of apparent inconsistency in people’s positions on moral issues. This has been known for thousands of years, but we are scarcely more consistent now than in the past. If we assume that any of the rules we ought to follow will be consistent with one another, this is a disaster and calls for us to down tools until right and wrong can be clarified. In other cases, popular intutive positions simply do not make sense.

A moral realist should also be trying to spread their bets to account for ‘moral uncertainty‘. Even if you think you have the right moral code, there is always the possibility you are mistaken and in fact a different set of rules are correct. Unless you are extremely confident that the rules you consider most likely, this ought to affect your behaviour. This is easily explained through an example which occurred to me recently concerning the debate over the ‘person-affecting view‘ of morality. According to this view, it would only be good to prevent a catastrophe that caused the extinction of humanity because such a catastrophe would affect people alive now, not because it ensures countless future generations never get to live. People who could exist in the future but don’t are not well-defined, and so do not quality for moral consideration. The case for putting enormous resources into ensuring humanity does not collapse is weaker if future people do not count. But how much weaker? Let’s say the number of (post-)humans we expect to live in the future, in the absence of any collapse, is a modest 1 trillion. The real number is probably much larger. If you thought there were just a 10% chance that people who weren’t alive now did in fact deserve moral consideration, that would still mean collapse prevented the existence of 100 billion future people in ‘expected value’ terms. This still dwarfs the importance of the 7 billion people alive today, and makes the case for focussing on such threats many times more compelling than otherwise. Note that incorporating moral uncertainty is unlikely to make someone stop focussing on collapse risk, because the consequences of being wrong in the other direction aren’t so bad.

This demonstrates that a moral realist with some doubt they have picked the right rules will want to a) hedge their bets b) focus disproportionate attention on plausible rules under which their choices have a bigger potential impact on the desirability of outcomes. This is just the same as uncertainty around matters of fact: we take precautions in case our model of how the world works is wrong, especially those errors under which our preferred choice could lead to a relative disaster. Despite this being a natural and important consideration for all moral realists, moral uncertainty is only talked about by a handful of moral philosophers.

Uncertainty about moral issues is scarcely a fringe concern because the quality of available evidence is so poor. Most moral reasoning, when we dig down, relies on nothing more than the competing intuitions of different people. The vast majority of people I know think the moral intuitions of the billions of people who lived in the past on matters such as racism, gender, sex, torture, slavery, the divine right of monarchs, animal cruelty and so on, were totally wrong. Furthermore, intuitive disagreement on moral questions remains vast today. Without a compelling reason to think our intuitions are better than those of others – and I don’t see one – the chances that we have all the right intuitions is frighteningly low.

I would go further and say there is no obvious reason for our moral intuitions to be tethered to what is really right and wrong full stop. It is almost certain that humans came about through the process of evolution. Evolution will give us the ability to sense the physical world in order to be able to respond to it, survive and reproduce. It will also give us good intuitions about mathematics, insofar as that helps us make predictions about the world around us, survive and reproduce. But why should natural selection provide us with instinctive knowledge of objective moral rules? There is no necessary reason for such knowledge to help a creature survive – indeed, most popular moral theories are likely to do the opposite. For this reason our intuitions, even where they agree, are probably uninformative.

I think this shows that most people who profess moral realism are in fact not. This is yet another obvious example of human hypocrisy. Professing objective morality is instrumentally useful for individuals and societies, and our minds can be easily shielded from what this implies. For anyone who actually does want to follow through on a realist position, I can see two options,

  • Hit the books and put more work into doing the right thing.
  • Concede that you have almost no chance of working out what is right and wrong, and could not gain much by trying. Moral skepticism would get you off the hook.

Personally, I would like to think I take doing the right thing seriously, so I am willing to offer a monetary prize of £300 for anyone who can change my mind on a) whether I ought to place a significant probability on moral realism being correct, or b) help me see that I seriously misunderstand what I subjectively value. Such insights would be a bargain!

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Democracy Is Competition

How much should business be regulated? This is often framed as a choice between the good feelings of freedom, and the costs of unmanaged cut-throat competition. But consider: the democracy that most people want to use to manage business is itself a form of cut-throat competition. That is, candidates usually have wide freedoms as they compete to get elected.

Oh sure there are places like Iran or China where democratic competition is highly regulated, such as via restrictions on who can run for office and what can be said to whom. But such places are usually seen as shams – real democracy must have highly competitive elections.

Fans of democratic regulation of business thus need to explain why mostly unregulated business competition is bad, while mostly unregulated candidate competition is good. In both cases ignorant customers are often exploited, and there can be lots of waste and duplication of effort.

Libertarians, who want pretty free business competition but more limits on what regulations democratically-elected governments can choose, also need to explain why business competition is good but democratic competition is bad. It is autocrats and Adictators who are the most consistent here – they usually want strong regulation of both.

Added 12Jan: Campaign finance rules seem more to regulate business than candidates. The intuition is that unfair business competition makes some people unfairly rich, and we shouldn’t let that unfairness influence elections.

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Tower Of Babel Still

If language evolved to allow us to exchange information, how come most people cannot understand what most other people are saying? This perennial question was famously addressed in the Old Testament story of the Tower of Babel. … The real puzzle is that the greatest diversity of human societies and languages arises not where people are most spread out, but where they are most closely packed together. Papua New Guinea is a classic case. That relatively small land mass – only slightly larger than California – is home to between 800 and 1000 distinct languages, or around 15 per cent of all languages spoken on the planet. This linguistic diversity is not the result of migration and physical isolation of different populations. Instead, people living in close quarters seem to have chosen to separate into many distinct societies, leading lives so separate that they have become incapable of talking to one another. Why? …

Languages act as powerful social anchors of our tribal identity. … distinct languages are an effective way to prevent eavesdropping or the loss of important information to a competitor. In support of this idea, I have found anthropological accounts of tribes deciding to change their language, with immediate effect, for no other reason than to distinguish themselves from neighbouring groups. …

Today, around 1.2 billion people – about 1 in 6 of us – speak Mandarin. Next come Spanish and English with about 400 million speakers each, and Bengali and Hindi follow close behind. (more)

Today much larger communities speak the same “language” in the sense of speaking English or Mandarin. But when it comes to the higher levels of specialized terminologies, styles of analysis, prototypical examples, etc. that naturally arise in different communities, organizations, and disciplines, it seems to me that a Tower of Babel still reigns. People quite often find it prohibitively hard to talk merely because different groups have gotten into the habit of talking differently, even though their concepts could be translated without great difficulty. And members of these groups often go out of their way to signal group loyalty by choosing to talk differently than outsiders.

The world fails dramatically to coordinate on language, both at the basic English-like level, and at these higher levels. Sometimes a nation will push hard to get everyone in the nation to speak the same basic language, in order to strengthen national solidarity. But beyond that, there is very little government effort to try to coordinate on language. Which just shows how hard is coordination, and how little of government is about coordination.

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Thank You TrikeApps!

In 2009 my co-blogger Eliezer Yudkowsky split off from Overcoming Bias (OB) to create the Less Wrong (LW) blog. TrikeApps wrote the feature-full software for LW, and Eliezer wanted to start it off with a high Google page rank via inheriting his posts here at OB. To support this, I agreed to let TrikeApps move OB from TypePad to a new platform where TrikeApps could turn Eliezer’s OB post links into hard links to posts at LW, to have recent LW and OB posts show up in a sidebar at the other site, and to have TrikeApps manage the technical aspects of OB.

Four years later, I’d like to send a big hearty THANK YOU to TrikeApps for their blog management. I expect it would have cost lots to pay someone to do the work they’ve done. I don’t have any plans to change this arrangement anytime soon, though I’m of course open to suggestions for other ways to manage and structure this blog.

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Why personal experimentation?

I experiment with many things, as do those around me. Some of this is randomization and explicit records, more is just trying different things, muttering ‘VOI‘ and repeating what felt good. I refer here to everything between a cautious banana-mustard-ham sandwich and polyamory.

Robin has suggested that I over-invest in such exploration. That most new things should be bad, and so most experimentation a private loss for public gain. What’s more, there shouldn’t be lots of low hanging fruit in trying things out. Most of the things humans frequently want to do (eat, sleep, change moods, organize time, learn, interact with others) should have been well figured out in ancient times. And anything that does still need checking out should be divided between many people.

Nonetheless, it looks to me like experimentation is worth it. Lots of the things we do seem barely satisfactory, there seem likely to be better alternatives, it seems hard to learn what has been tried for what ends, or what is good from listening to others or reading, and I and my friends seem to actually find good things by looking. e.g. Beeminderexplicit charity evaluation, unusual degrees of honesty, workflowy and explicit organization seem to often add value over the defaults, not to mention many tiny things, like banana-mustard-ham sandwiches.

If it is true that a lot of experimentation is worth it, we have a slight puzzle: if there is valuable information I might glean by experimentation, why hasn’t it been worth it for others in the past to collect it and put it where I can see it?

I will try to answer this over the next few posts. Before that, what do you think?


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Which supplements should a healthy person take?

I have recently been looking into which, if any, nutritional supplements I should start taking. I am in good general health so am looking for supplements that are likely to maintain or improve that health, not cure any particular condition. I have been using three excellent sources for this project, which I can recommend checking out: [1]

For those who want to save time, I will outline my key conclusions here in the hope that doing so will help you. I have decided to start taking:

  • Vitamin D3 (10µg or so a day)
  • Creatine (5g a day)
  • Zinc (30-160mg and Vitamin C (>1g)  each day for the duration of colds.

Tyrosine and potassium are also both cheap and so I will trial them to see if they improve my concentration. I don’t consider them likely to work, but they are at least worth testing. Fluoride mouthwashes also seem a cheap way to reduce the risk of cavities.

Vitamin D has a large evidence base suggesting it significantly lowers ‘all-cause mortality’ and improves both general and bone health. It is especially important now that I am living in the UK, where it is much harder to get Vitamin D from sun exposure.  It is also inexpensive. [2] Basically, it is a no-brainer. The 10µg is twice the daily recommended dietary dose in the UK. For some reason, Gwern is taking a very large 125µg each day. Personally I am tempted to err on the low side due to recent research suggesting too much Vitamin D can raise mortality.

Creatine is best known as a supplement for body-builders, but I am taking it primarily because I hope it will improve my cognition. The evidence to back this is thin, and only finds a significant effect among subgroups like vegetarians, perhaps because they get less creatine from meat consumption. However, the effect size identified was very large, it is cheap and largely safe. I am an almost-vegetarian and lift weights so it is more likely to be worthwhile for me. I will also be able test whether it improves my energy and concentration and stop using it if it doesn’t. This review also finds a range of other worthwhile positive impacts on health.

There is compelling evidence that zinc helps reduce the intensity and duration of colds. As summarised by Cochrane:

Zinc inhibits rhinoviral replication and has been tested in trials for treatment of the common cold. This review identified 15 randomized controlled trials, enrolling 1360 participants of all age groups, comparing zinc with placebo (no zinc). We found that zinc (lozenges or syrup) is beneficial in reducing the duration and severity of the common cold in healthy people, when taken within 24 hours of onset of symptoms.

There are some concerns about side effects, but they do not seem significant in the scheme of things. The tablets can also be obtained cheaply and easily. The appropriate dose is unclear, but studies included in the meta-analysis used between 30-160mg. I will probably choose a figure in the middle of that, and keep some tablets at work and home so I can always take them immediately at the onset of symptoms.

Despite a large number of studies, evidence to back an effect of Vitamin C on colds in the general population is mixed, with positive effects only reliably found on those engaging in extreme exercise. I worry that positive results on such sub-populations could just be the result of data mining, publication bias or other chicanery. Nonetheless, there are no side effects and the tablets are cheap. I consider it worth taking at the onset of colds, even if the probability of any real effect is under a third. Furthermore, effervescent vitamin C tablets are tasty and comforting to drink, and being as conspicuous as they are, may produce a larger than usual placebo effect.

Incidentally, most infection by common colds is caused by surface to surface contact. Using an ethanol handwash after touching shared surfaces, and reducing how often you touch your face with your hands, is likely to significantly reduce their occurrence. If you didn’t already have one, the desire not to get colds is a good selfish reason to wash your hands after using the bathroom. Poor general health is not the problem, as even healthy people who are exposed to the virus are highly likely to become infected.

If I were particularly worried about my blood pressure or cardiovascular health I would start

However, I am young, and consider heart disease to be a problem for the future.

I am keen to hear if I am making mistakes in the above, or missing out on other valuable chances to improve my life. Thanks to Seb Farquhar and Will Crouch for help with this research.

[1] Cochrane’s ‘house effect’ is to frequently find that there is insufficient evidence to draw any conclusion. Where they do make a recommendation, the evidence backing it is likely to be compelling. Gwern’s advice extends to unusual supplements about which there is little other information. Unfortunately, is in based in significant part on personal experiences. While he has tried to do blind and controlled trials  on himself with sufficient sample sizes, I don’t consider one individual’s experiences to be compelling evidence relative to large trials and meta-analyses. He often doesn’t have a statistically significant effect, in part due to small samples. Nonetheless, if the cost of a supplement is low, and it is safe, it can be worth taking even with a low probability of an effect. Snake-Oil Supplements falls somewhere in the middle.

[2] Reasonably cheap sources of: creatine, Vitamin D, Vitamin C and Zinc, tyrosine and potassium. Mouthwashes with over >200ppm of fluoride are widely available, but you should check the label.

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