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How to make good guesses
| FT | Tim Harford

“base rate”,

Base rates are not just a forecasting aid. They’re vital in clearly understanding and communicating all manner of risks. We routinely hear claims of the form that eating two rashers of bacon a day raises the risk of bowel cancer by 18 per cent. But without a base rate (how common is bowel cancer?) this information is not very useful. As it happens, in the UK, bowel cancer affects six out of 100 people; a bacon-rich diet would cause one additional case of bowel cancer per 100 people.

Thinking about base rates is particularly important when we’re considering screening programmes or other diagnostic tests, including DNA tests for criminal cases.
base_rates  communicating_risks  economics  forecasting  guessing  howto  predictions  probabilities  Tim_Harford  ratios 
april 2016 by jerryking
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