2. Copyright © 2011 Pearson Education, Inc. Probability: Living with the Odds Discussion Paragraph 7C 1 web 39. Lotteries 40. The Morality of Gambling 1 world 41. Law of Large Numbers 42. Personal Law of Large Numbers 43. The Gambler’s Fallacy

3. Copyright © 2011 Pearson Education, Inc. Slide 7-3 Unit 7D Assessing Risk

4. 7-D Copyright © 2011 Pearson Education, Inc. Slide 7-4 Risk and Travel Is driving getting safer? 1970: 2008:

5. Is Driving Getting Safer CN (1) The last graphic shows the number of automobile fatalities and the total number of miles driven (among all Americans) per year from 1970-2008. In terms of death rate per mile driven, compare 1970 (approx. 52,600 deaths and 1.1 million miles driven) with 2008 (approx. 37,300 deaths and 2.9 trillion miles driven). 1. Comment on how the risk of driving has changed. Copyright © 2011 Pearson Education, Inc. Slide 7-5

6. Which is Safer: Flying or Driving? CN (2a-b) For the period 1989-2008, the average number of deaths in commercial airplane accidents in the US was roughly 60 per year. (The actual number varied significantly from year to year.) As of 2008, airplane passengers in the US traveled a total of about 8 billion miles per year. a. Use these numbers to calculate the death rate per mile of air travel. b. Compare the risk of flying to the risk of driving. Copyright © 2011 Pearson Education, Inc. Slide 7-6

7. 7-D Copyright © 2011 Pearson Education, Inc. Slide 7-7 Vital Statistics What is the risk per person for stroke?

8. Interpreting Vital Statistics CN (3) Use the table from the last slide: 3. Assuming a US population of 300 million, find and compare the risks per person and per 100,000 people for pneumonia/influenza and cancer. Copyright © 2011 Pearson Education, Inc. Slide 7-8

9. 7-D Copyright © 2011 Pearson Education, Inc. Slide 7-9 Life Expectancy Life expectancy is the number of years a person with a given age today can expect to live on average.

10. 7-D Life Expectancies CN (4) Use the Figure from the last slide. Find the life expectancies of a 20 year old person and a 60 year old person. 4. Are the numbers consistent? Explain. Copyright © 2011 Pearson Education, Inc. Slide 7-10

11. 7-D Case Study CN (5a-c) SS benefits are paid from a combination of taxes collected from today’s wage earners and the SS Trust Fund. Because of all the change, the number of people who will collect is expected to be much larger. One challenge of SS is finding a way to have enough to pay benefits for future retirees. Current projections – unable to pay after 2037. SS has proposed ways to solve problem: Change the amount of benefits paid Increase SS tax rate Change retirement age Partially or fully privatizing the SS program These proposals based on assumptions about future life expectancy. SS officials have assumed that life expectancy at birth will rise only slightly during this century. For example, projections assume American women will not reach 82 until 2033 – but women in France have already achieved this. a. Does it really seem likely that it will take until 2033 for the US to reach the life expectancies that are already found in many other nations? b. If SS projections are underestimating future changes in ages, are the financial problems far worse than policy makers are banking on? c. Overall do you think large increases in life expectancy will be good or bad for society? Slide 7-11

12. 7-D Quick Quiz CN (6) 6. Please answer the 10 quick quiz multiple choice questions on p. 454. Copyright © 2011 Pearson Education, Inc. Slide 7-12

13. 7-D Homework 7D Discussion Paragraph 7C Class Notes 1-6 p.455:1-8 1 web 32. Cancer vs. Heart Disease 33. Travel Safety 34. Life Expectancy 1 world 35. Travel Safety 36. Vital Statistics 37. Life Expectancies Copyright © 2011 Pearson Education, Inc. Slide 7-13