Academic journal article Journal of Risk and Insurance

Once upon a Number

Academic journal article Journal of Risk and Insurance

Once upon a Number

Article excerpt

Once Upon a Number, John Allen Paulos, 1998, New York: Basic Books

Reviewer: James Kallman, School of Risk Management, Insurance, and Actuarial Science, St. John's University

John Allen Paulos is a professor of mathematics who writes on mathematical logic, probability, and the philosophy of science. Fortunately for the reader, Paulos' style of writing creates a blend of entertainment with cold statistics. The reader learns how numbers and real life are juxtaposed; they interact in surprising and fascinating ways. The reader also learns how we force this interchange on situations to sometimes create erroneous conclusions and make defective policy.

Once Upon a Number is of interest to the professor and student of risk management because it reinforces the procedure of statistically analyzing life events (the author calls them "stories") and because it points out a serious flaw in our methodology (confusing correlation with causation). As scholars, we can define objective risk as the variation from the expected outcome over time. This definition implies an understanding of two statistical concepts: the mean value and the average deviation from that expected outcome. Thus, in studying risk we study statistics. We then impose our statistical methodology upon life events (risks and opportunities, or "stories") to better understand them and make informed decisions.

The author blends contemporary scientific analysis with amusing anecdotes to demonstrate the need for critical thinking when applying our venerated techniques. His book provides us with a mental check and balance on our exuberance for imposing patterns or causation where none may exist. …

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