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| 7/13 |
| 2006/2/17-20 [Transportation/Car] UID:41900 Activity:high |
2/17 This week's Powerball is $365M. Is there a CSUA Powerball group-buy?
http://www.slate.com/id/114577
\_ Why, can't CSUA members do math?
\_ Dang, you took my joke.
\_ It depends on the value you put on different amounts of
money. What is $1M worth to you relative to $1? 1Mx?
More? Less?
\_ Agreed. This is the same reason why people want to buy
insurance even though they already know the cost is higher
than the expected value of the return.
\_ Actually most people are forced to have insurance. CA
requires car insurance. My bank requires me to have
home insurance. My company is required to provide me
with health insurnace, etc.
\_ True to some extent. CA only requires liability car
insurance. You can work as a contractor to get
higher wage and no health insurance. I don't know of
anything that requires life insurance, umbrella
insurance, or vacation travel insurance.
\_ Even though sometimes the math vs the odds don't
work out in your favor on insurance, the real
world cost of replacing the item if you're
unlucky is too high to risk not paying for the
insurance which you can actually afford. If the
odds of my house being destroyed by some event
were near zero but the insurance against that
event was $10/year, I'd still pay the $10 to
be protected against an oddball event because the
$10 is nothing but I'd really really really miss
my house if it got hit by a meteor, for example.
OTOH, as an insurance company, it is to their
benefit to allow cheap but not statistically
useful insurance payments because they can play
the odds and come out ahead anyway even if the
event happens, forcing the unlikely payout. An
individual can't afford to lose the meteor
strike bet but can afford to buy the insurance.
(No I don't have meteor insurance). My house is
in a "once per hundred year flood zone" which is
their way of saying I shouldn't ever get flooded
and they won't sell me flood insurance, but if it
was available and $10 a year I'd take it since
Shit Happens and there is a stream/river 25 yards
away.
\_ Flood insurance wouldn't be $10/year, it
would be approximately ((replacement cost
of house)-(value of having your capital
over time)/100)+(profit margin). That is
likely to work out to several hundred dollars
a year at least. They don't offer the
insurance because no one would buy it at
that cost; if they could profitably offer
it for $10/year, they would. -tom
\_ Living in a 1/100 per year flood zone means
that there is about a 26% chance (.99^30)
that it will flood before the house is even
paid off. -ausman
\_ "Once per hundred year flood zone" is
insurance jargon for "it would take an
act of god to flood this place since
there's no place for a flood to come
from". They don't literally mean it
floods every 100 years. It hasn't flooded
in the known history of this region. So,
they actually could make a profit at $10/
year but things go against them because
if there is an act of god, they're stuck
covering it for a lousy 10 bucks. The
profit margin is too low to take the risk,
even though the risk is *essentially* zero,
it isn't truly zero. Anyway, I've got a
bucket and know how to swim if it goes
that way. :-)
\_ You have no idea what you're talking
about. The entire insurance business
is built on amortizing costs over
time and across their entire customer
base. They are *very good* at
computing the probabilities of claims
against their policies and the
cost/benefits thereof.
http://www.fema.gov/fhm/fq_term.shtm#frequt2
-tom
\_ Of course I don't. I'm only telling
you what my insurance guy told me,
but I'm sure you're smarter than he
is and know exactly what the flood
conditions are in my area. YOU ARE
PERFECT! HOW CAN I BE YOU?!
\_ 100-year floodplains are set
by FEMA engineers based on
historical and archaeological
data, not by the insurance
companies. Is your insurance
guy a water systems engineer?
-tom
\_ He doesn't have to be. Why
would you think that? Are
the FEMA records top secret?
I still want to always be
right like you no matter how
trivial and meaningless the
point. How can I achieve your
absolute level of perfection?
You have never been wrong about
anything. I admire that.
\_ If the FEMA records say
you're in a 100-year flood
zone, that means they
believe there's about a 1%
chance per year that your
house will be flooded.
It's quite simple. And
your entire argument that
you've spent 25-30 lines
describing is completely
meaningless as long as
that is true. So why don't
you admit *you* are wrong
instead of being both
idiotic and smug? -tom
\_ Why not just admit you're
wrong?
\_ Tom, are you a Bayesian or a
Frequentist?
\_ The Russian River area has had two "100
year" floods in the last decade. -ausman
\_ Don't forget tax.
\_ Well, I do value $1 I have more that $1M I'll never
have.
\_ can californians play? how?
\_ I assume there would be CSUAers in Powerball states.
\_ How do you prevent getting screwed in a group buy?
\- [The state lottery is] a public subsidy of intelligence
[since] it yields public income that is calculated to
lighten the tax burden of us prudent abstainers at the
expense of the benighted masses of wishful thinkers.
--WVO Quine |
| 7/13 |
|
| www.slate.com/id/114577 It all depends on when you play--and what value you put on a dollar. My father and his PhD in statistics put me in for a 20 percent share of his four tickets. But I got enough razzing from friends and neighbors that I thought it was worth explaining why, from a mathematician's point of view, last Saturday's drawing wasn't necessarily dumb. The question to ask is: What is the expected value of a lottery ticket? If the expected value is more than a dollar, and the ticket costs a dollar, you should buy a ticket. If the expected value is less than a dollar, you should keep your money. "Expected value" doesn't just mean "what do you expect?" After all, you probably expect the ticket to be worth nothing. "Expected value" as I mean it here is a mathematical definition that assigns a fixed value to an object whose true value is subject to uncertainty. For instance, suppose you place a bet on a horse that has a 1/10 chance of winning, and the bet pays $100. Then the probability is (1/10) that your ticket will be worth $100 and (9/10) that your ticket will be worth nothing. So, the expected value of the ticket is (1/10) x $100 + (9/10) x 0 = $10. Why is $10 a good definition of the value of the ticket? Because if you spent a week at the track and bought, say, 250 such tickets, you'd probably end up winning about 25 times; So, if you were paying more than $10 for each ticket, you'd be a loser; The problem with that argument is that we weren't playing for the $280 million. We were playing for our share of the $280 million, thanks to the possibility of multiple winners. If I win the Powerball, the chance is pretty good that somebody else is going to win, too. And the more people who play, the more the prize will tend to divvy up. If, as happened in real life this week, four people win, you're looking at just $70 million. So how many people could you expect to share the prize with? So Saturday's fourfold victory was a bit of a surprise but not a real shocker. A Powerball enthusiast suggested to me that people are especially fond of picking lucky 21 on the red ball and that this could explain the large number of winners. Powerball records show that the number of people who picked 21 on the red ball was only half a percentage point greater than would have been expected by chance. On average, the winner could expect a 37 percent share of the jackpot, or $103 million. Still a good deal--especially because we haven't even thrown in the chance of winning a lesser prize. First of all, it was pretty clear somebody was going to win. There's a nice rule of thumb for working out questions like this. Suppose there's an event whose probability is 1 in X, where X is a really big number. And suppose you have Y chances for this event to happen. Then the chance the event will happen is just about 1 - e^-Y/X; here e is a famous mathematical constant whose value is about 2718. The unexpected entrance here of e, the base of the natural logarithms, is one of life's happy mysteries; the better constants, like e and pi, appear in all kinds of contexts having no connection whatever with logarithms or with the circumferences of circles. We should also point out that, because the exponent is negative, the value of 1 - e^-Y/X is between 0 and 1, as a probability should be. As Y/X gets bigger and bigger, the exponential e^-Y/X gets closer and closer to 0, and the probability that someone will win gets closer and closer to 1--just as it should do when the number of players increases. For Powerball, X is about 80 million, and the number of tickets is about 200 million. The nice thing about this rule of thumb is that it only depends on the ratio between the odds of winning and the number of players. If the odds were 1 in 1,000, and 2,500 tickets were sold, the odds of someone winning would be just about the same. So the masters of Powerball take in $200 million in ticket sales for Saturday's drawing. Very likely, they pay out $280 million in jackpot--not to mention the sub-jackpot prizes, which amounted to $41 million in Saturday's drawing. And if the house loses, by definition, the average player wins. why would a casino run a game where the house stands to lose? The answer is that the current large jackpot is the result of a long string of games when the house did win. Cumulative-jackpot lotteries such as Powerball are essentially a massive transfer of value from the dupes who play when the jackpot is small to the wiser ones who wait until the jackpot is big, with the house taking a healthy cut along the way. Here's the one piece of solid advice in this column: If you play Powerball every day, stop playing Powerball every day. If your dollar can be spent for a 1 in 80 million chance of $10 million or a 1 in 80 million chance of $120 million, why would you choose the former? Lottery unenthusiasts will have already noticed that that $280 million isn't making its way to you unimpeded; And a few million dollars 10 years from now is worth less than the same payment today. You might die in between or just get bored with being rich. It turns out that they add only 21 cents--that's 21 cents before taxes--to the expected value of your ticket. But there's an even deeper problem, which is this: It's by no means clear that the benefits of having $280 million are 280 million times as great as the benefits of holding onto your original dollar. Some people will gladly trade a dollar for a 1 in 10 chance of $10. psychologists have learned a lot about what people typically do prefer. Mostly, people are "risk-averse"--given the choices above, they'd keep their dollar. It comes down to this: How much did you want $280 million dollars? Jurisprudence: Let's All Just Pretend Guantanamo Doesn't Exist Invisible Men It's an immutable rule of journalism that when you unearth three instances of a phenomenon, ... |
| www.fema.gov/fhm/fq_term.shtm#frequt2 A 100-year flood is a flood that has a 1-percent chance of being equaled or exceeded in any given year. A base flood may also be referred to as a 100-year storm and the area inundated during the base flood is sometimes called the 100-year floodplain. It is not the flood that will occur once every 100 years. Rather, it is the flood elevation that has a 1- percent chance of being equaled or exceeded each year. Thus, the 100-year flood could occur more than once in a relatively short period of time. The 100-year flood, which is the standard used by most Federal and state agencies, is used by the National Flood Insurance Program (NFIP) as the standard for floodplain management and to determine the need for flood insurance. A structure located within a special flood hazard area shown on an NFIP map has a 26 percent chance of suffering flood damage during the term of a 30-year mortgage. A Base Flood Elevation (BFE) is the height of the base flood, usually in feet, in relation to the National Geodetic Vertical Datum of 1929, the North American Vertical Datum of 1988, or other datum referenced in the Flood Insurance Study report, or average depth of the base flood, usually in feet, above the ground surface. back to top 5 What is a Special Flood Hazard Area (SFHA)? In support of the National Flood Insurance Program (NFIP), FEMA has undertaken a massive effort of flood hazard identification and mapping to produce Flood Hazard Boundary Maps, Flood Insurance Rate Maps, and Flood Boundary and Floodway Maps. Several areas of flood hazards are commonly identified on these maps. One of these areas is the Special Flood Hazard Area (SFHA), which is defined as an area of land that would be inundated by a flood having a 1% chance of occurring in any given year (previously referred to as the base flood or 100-year flood). The 1% annual chance standard was chosen after considering various alternatives. The standard constitutes a reasonable compromise between the need for building restrictions to minimize potential loss of life and property and the economic benefits to be derived from floodplain development. Development may take place within the SFHA, provided that development complies with local floodplain management ordinances, which must meet the minimum Federal requirements. back to top 6 What are the different flood hazard zone designations and what do they mean? Zone A Zone A is the flood insurance rate zone that corresponds to the 100-year floodplains that are determined in the Flood Insurance Study by approximate methods. Because detailed hydraulic analyses are not performed for such areas, no Base Flood Elevations or depths are shown within this zone. Zone AE and A1-A30 Zones AE and A1-A30 are the flood insurance rate zones that correspond to the 100-year floodplains that are determined in the Flood Insurance Study by detailed methods. In most instances, Base Flood Elevations derived from the detailed hydraulic analyses are shown at selected intervals within this zone. Zone AH Zone AH is the flood insurance rate zone that corresponds to the areas of 100-year shallow flooding with a constant water-surface elevation (usually areas of ponding) where average depths are between 1 and 3 feet. The BFEs derived from the detailed hydraulic analyses are shown at selected intervals within this zone. Zone AO Zone AO is the flood insurance rate zone that corresponds to the areas of 100-year shallow flooding (usually sheet flow on sloping terrain) where average depths are between 1 and 3 feet. The depth should be averaged along the cross section and then along the direction of flow to determine the extent of the zone. Average flood depths derived from the detailed hydraulic analyses are shown within this zone. In addition, alluvial fan flood hazards are shown as Zone AO on the FIRM. Zone AR Zone AR is the flood insurance rate zone used to depict areas protected from flood hazards by flood control structures, such as a levee, that are being restored. FEMA will consider using the Zone AR designation for a community if the flood protection system has been deemed restorable by a Federal agency in consultation with a local project sponsor; a minimum level of flood protection is still provided to the community by the system; and restoration of the flood protection system is scheduled to begin within a designated time period and in accordance with a progress plan negotiated between the community and FEMA Mandatory purchase requirements for flood insurance will apply in Zone AR, but the rate will not exceed the rate for unnumbered A zones if the structure is built in compliance with Zone AR floodplain management regulations. For floodplain management in Zone AR areas, elevation is not required for improvements to existing structures. However, for new construction, the structure must be elevated (or floodproofed for non-residential structures) such that the lowest floor, including basement, is a maximum of 3 feet above the highest adjacent existing grade if the depth of the base flood elevation (BFE) does not exceed 5 feet at the proposed development site. For infill sites, rehabilitation of existing structures, or redevelopment of previously developed areas, there is a 3 foot elevation requirement regardless of the depth of the BFE at the project site. The Zone AR designation will be removed and the restored flood control system shown as providing protection from the 1% annual chance flood on the NFIP map upon completion of the restoration project and submittal of all the necessary data to FEMA Zone A99 Zone A99 is the flood insurance rate zone that corresponds to areas of the 100-year floodplains that will be protected by a Federal flood protection system where construction has reached specified statutory milestones. Zone D The Zone D designation on NFIP maps is used for areas where there are possible but undetermined flood hazards. In areas designated as Zone D, no analysis of flood hazards has been conducted. Mandatory flood insurance purchase requirements do not apply, but coverage is available. The flood insurance rates for properties in Zone D are commensurate with the uncertainty of the flood risk. Zone V Zone V is the flood insurance rate zone that corresponds to the 100-year coastal floodplains that have additional hazards associated with storm waves. Because approximate hydraulic analyses are performed for such areas, no BFEs are shown within this zone. Zone VE Zone VE is the flood insurance rate zone that corresponds to the 100-year coastal floodplains that have additional hazards associated with storm waves. BFEs derived from the detailed hydraulic analyses are shown at selected intervals within this zone. Zones B, C, and X Zones B, C, and X are the flood insurance rate zones that correspond to areas outside the 100-year floodplains, areas of 100-year sheet flow flooding where average depths are less than 1 foot, areas of 100-year stream flooding where the contributing drainage area is less than 1 square mile, or areas protected from the 100-year flood by levees. What does it mean for me if my home or land is in the floodway? Rivers and streams where FEMA has prepared detailed engineering studies may also have designated floodways. For most waterways, the floodway is where the water is likely to be deepest and fastest. It is the area of the floodplain that should be reserved (kept free of obstructions) to allow floodwaters to move downstream. Placing fill or buildings in a floodway may block the flow of water and increase flood heights. Because of this, your community will require that you submit engineering analyses before it approves permits for development in the floodway. If your home is already in the floodway, you may want to consider what you will do if it is damaged. If it is substantially damaged (the costs to repair equal or exceed 50% of the market value of the building) your community will require that you bring it into compliance. In most cases, this means you will have to elevate it above the base flood elevation. Because placing fill dirt in the floodplain can make flooding worse, you'll probably have to elevate on columns, pilings or raised ... |