- rmacculloch
Are the Kiwi virus modelling "experts" trying to predict the unpredictable?
The whole nation is hanging on its seats trying to predict what will happen the next few weeks in terms of virus numbers. The country has ground to virtually a complete halt. The pronouncements of the Finance Minister that this is just a temporary economic shock, the fall-out of which can be quite easily handled by the wage subsidy scheme and more borrowing, don't wash at all. Just like you and me, he has little to no idea about how big will be the scale of the fall-out this time around.
Prominent commentator, Professor Michael Baker, told Newshub today, "We've heard from the modeler a range of estimates from 50 to 120 cases. I think that's still a pretty realistic range". But how? We've already had over 70 cases. The range to which he refers would mean cases subsequently halving to 10 and staying at that level for just 5 more days before vanishing entirely!? Isn't that scenario totally unrealistic? Yet our government has been relying heavily on the "stochastic models" & "simulations" of the modelers to which he refers. Those modelers are often referred to in the media & they wrote a paper last year called "Managing the risk of a COVID-19 outbreak from border arrivals".
Now I'm all for taking scientific approaches, but how informative is this kind of modelling? The most famous economist of all, John Maynard Keynes, who wrote a book called "A Treatise on Probability", didn't think much of the "risk modelling" approach when it came to economic forecasting. He believed more in "Knightian uncertainty" - which is defined as a lack of any quantifiable knowledge about some possible occurrence - as opposed to the presence of quantifiable "risk".
Knightian uncertainty acknowledges some fundamental degree of ignorance, a limit to knowledge, and an essential unpredictability of future events. “True uncertainty,” as Frank Knight called it, is “not susceptible to measurement". An airline might forecast that the risk of an accident involving one of its planes is exactly one per 20 million takeoffs. But the economic outlook for airlines 30 years from now involves so many unknown factors as to be incalculable.
A recent and related debate famously centers on "black swan events", which are defined as "important and inherently unpredictable outcomes that, once occurred, are rationalized with the benefit of hindsight". Appropriate preparation for these events is frequently hindered by the pretense of knowledge of all the risks.
My opinion is that predicting the future path of our current virus outbreak is way, way more in the category of "true uncertainty" than about calculating quantifiable "risks". So maybe its time for more humility from the modelers about the limits of their knowledge, assumptions and applicability of the mathematical techniques which they are using?
Sources:
Steyn N, Binny RN, Hendy S, James A, Lustig A, Plank M (2020). https://scholar.google.com/scholar_lookup?hl=en&publication_year=2020&author=N+Steyn&author=RN+Binny&author=S+Hendy&author=A+James&author=A+Lustig&author=MJ.+Plank&title=Managing+the+risk+of+a+COVID-19+outbreak+from+border+arrivals&doi=10.1101%2F2020.07.15.20154955