The problem with probability

Updated June 05, 2011 17:24:04

What does disaster management and pokies reform have in common?

They both deal with a fundamental problem of human psychology - the failure to understand probabilities.

This was pointed out to me recently by a former hydrologist, and now psychologist, Professor Neal Ashkanasy from the University of Queensland.

He was frustrated - but not surprised - by the number of people blaming Wivenhoe Dam for the recent Brisbane floods.

Professor Ashkanasy argues that flooding is inevitable in sub-tropical catchments, and no amount of human engineering can overcome this.

Yet, many Brisbane residents were genuinely surprised by last summer's disaster.

"The reason why people behave this way is the reason why I'm a psychologist rather than a hydrologist because in many cases it's human attitudes and human psychology that determines the way people respond to events such as this," he said.

Admittedly, there is plenty of evidence that Brisbane's system of flood mitigation could have worked better.

The person heading Queensland's flood inquiry, Commissioner Catherine Holmes, has described the operation manual for Wivenhoe dam as 'a bit of a mess'.

But Professor Ashkanasy argues that the only way of completely flood-proofing Brisbane, is not to build or live in the flood plain.

He has no doubt however these vulnerable areas will continue to be developed, and people will continue to be surprised when disaster hits.

"Human beings struggle to deal with probabilities. If human beings were good with probabilities there wouldn't be any gambling industry."

Now that's an interesting idea.

Rather than try to negotiate ways of managing problem gamblers - why don't we have a public campaign to explain how poker machines actually work?

And the message would be something along the lines of: "If you regularly have a flutter on the pokies, over time you cannot win."

If that sounds a little over the top, then you've failed to come to terms with probability.

The productivity commission produced two reports on gambling in 1999 and 2010.

The earlier report had a very interesting analysis of how poker machines operate.

Appendix U goes into a detailed analysis of the complicated return rates of a number of different machines, before coming to a general conclusion.

"Gaming machines are entertaining precisely because of interesting game features and the unpredictability of the outcomes.

"The complex payoff distributions in gaming machines mean that the returns that gamblers make from games vary significantly in the short run..." the commission found.

"A once-a-week hourly session of gambling will produce significant differences in returns from week to week.

"It would not be unusual to win $100 in one week and lose $100 in the next."

Over a month, however, the commission found that returns are much less volatile, with significantly reduced probabilities of being a winner overall.

And then comes the stark conclusion:

"Over a lifetime of regular playing (30 years) the probability of winning overall on the type of machine simulated is so remote that it may as well be regarded as impossible."


I wonder how many gamblers know this?

And if they did, would it make any difference to their behaviour?

And here's another uncomfortable probability fact.

The chances of Brisbane flooding next year are more or less the same as the chances at the beginning of this year.

There's rarely a 100-year gap between 1-in-a-100-year floods.

Peter McCutcheon is a senior journalist and former foreign correspondent, who has been with the ABC's 7.30 Report in Brisbane since 2003.

Topics: emergency-incidents, community-and-society, gambling, disasters-and-accidents, floods, australia

First posted June 02, 2011 08:43:00

