On the counting heuristic

Simon asks for a sense of proportion about the allegations of Hillary Clinton’s misuse of emails:

The media obsesses over whether Clinton might have sent an email containing confidential information from her personal account while secretary of state, and also wonders about whether Trump tells lies, pays any taxes, bribes officials and assaults women. Anyone who reads these stories can see that there is no equivalence here. But anyone who just reads the headlines would be tempted to think otherwise.

There might be a more widespread cognitive bias at work here. We can call it the counting heuristic – a tendency to judge things by frequency rather than impact. Here are three examples:

 - A lovely paper by Michael Ungehauer and Martin Weber shows that people evaluate correlations between asset returns simply by looking at the frequency of co-movement. This can lead them to under-estimate correlations by putting too little weight upon a few large moves. But in risk management it is these moves that matter: a stock that falls only slightly when markets slump is worth having. Neglecting this causes defensive stocks to be under-priced.

 - In the mid-00s, a long run of stable returns led banks to presume that mortgage derivatives were relatively safe. They therefore under-estimated tail risk – the small chance of disaster. Investors and corporate managers can under-estimate the importance of low-frequency, high-impact events in non-financial firms too.

 - The peak-end rule tells us that we look back more fondly upon a nasty experience if it is followed by discomfort than if it suddenly ends. For example, colonoscopy patients who had the scope left in for a few minutes at the end of the procedure evaluated their experience as less unpleasant than those who had it immediately removed. In this way, the duration of an experience can mislead us as to its impact.

These experiences all imply that a steady drip-drip of minor allegations such as those against Clinton can weigh more heavily in people’s minds than more serious allegations – just as the drip-drip of small co-movements distracts people from important large co-movements, or frequent small returns distract people from the risk of big losses, or a frequent discomfort can cause them to misremember real pain.

One simple question should help us combat the bias generated by the counting heuristic. Just as the first question you must ask of any statistic is: is that a lot or a little? So we must always ask of any news story: so what?

Size matters. For example, the countless stories about Clinton’s misuse of emails (which might be exaggerated by the error of correlation neglect) pose the question: is a neglect of bureaucratic protocols really more serious than tax-dodging and sexual assault?

This over-weighting of frequency and under-weighting of impact has also infected UK politics. Here are four examples:

 - In the 2015 election campaign there were numerous stories about the “cost” of Labour’s policies. Such stories generally failed to point out that these costs were much smaller than the cost of Tory austerity.

 - The frequency of stories about benefit fraud obscures the fact that the “cost” of such fraud is in fact low – and in fact, is often a transfer from tax-payers to companies or landlords.

 - Tory attacks on the Bank of England pose (but do not answer) the question: even if we grant that there have been monetary policy errors, how big are these relative to the cost of fiscal policy errors or Brexit?

 - The tabloids’ fuss about some migrants falsely claiming to be children raises the question: so what if we let into the country a few 20-something refugees?

My point here should be a trivial one – that quantification matters. However, the interaction of a vicious media with cognitive biases means that even trivial points get neglected in politics.

Comments

[Dave Hansell]

Its a shame some of these examples were not used in the previous article, which might well have avoided the misunderstanding with Igor.

[Rev. Spooner]

Good post, and thought-provoking as usual, but you are understating potential impact on Clinton's part.

Poor control of Classified information is more than "...a neglect of bureaucratic protocols..."

Classified data has the potential to affect lives, both directly and in the longer term. That's why classification exists. Now, it's quite possible - even likely - that some material will have been over-classified, whether to avoid embarrassment or for other inappropriate reasons. But given the reported volume, not all of it will, and so there are likely to have been risks to life in what she did. So the impact is more important than implied by your words "a neglect of bureaucratic protocols".

[Luke]

Rev Spooner - "Poor control of Classified information is more than "...a neglect of bureaucratic protocols..."

Yes, but HRC's server seems to be the only one in America not hacked by the Russians.

[Dave Timoney]

@Rev Spooner,

"Classified data has the potential to affect lives, both directly and in the longer term. That's why classification exists".

Classified simply means it is an official record (in Hillary Clinton's case, it's a "business" email sent via a private account) and thus subject to a classification scheme. This doesn't imply anything about a particular message's content or importance. If she sent out for pizza using her work email, that would be classified.

You're confusing "official" with "sensitive", which is ironic given Chris's point about the distinction between frequency and impact.

[Luke]

Slightly going against Chris's point, can frequency numb us to into underestimating importance?

E.g. any mention of Clinton emails has me thinking "oh that again", even if it's new (I can't be bothered to check). Similarly Trump being sexist -"we knew that anyway", even if it is something new that should change our minds as to the seriousness of what he's done and/or the weight of evidence.

[Eminent emigrant]

My understanding was that Clinton was seeking to bypass future FOI requests. In that case it is a bit more than an administrative oversight.

[reason]

People still don't get some pertinent information about the "email affair". (Please read Kevin Drum.)
1. She was given the option of using private mail and plenty of other senior people in the department used private mail (including her Republican predecessor).
2. Her real problem is that private and work emails were received in the same email account. She didn't want to avoid FOI for work business only for private.
3. Her reason for using a private server was that the only alternative was to carry two smart phones around with her (not a technical reason - I have two email accounts on one device, but an internal one - State needs a new IT department).
4. Nobody sends anything really important and secret via email (and so public networks) anyway. All really secret stuff was sent by other means.

[john]

"Size matters. For example, the countless stories about Clinton’s misuse of emails (which might be exaggerated by the error of correlation neglect) pose the question: is a neglect of bureaucratic protocols really more serious than tax-dodging and sexual assault?"

This seems to miss the important issues on both sides.

HRC's negatives are not a cavalier attitude toward security protocol, eager interventionism (currently trying to get a flame going with Russia), and historical support for disastrous social institution changes.

Trump's negatives are no misogynism among other things, but the baggage he would bring in to government in the form of Reagan Bush retreads, whose potential damage we know well.

I'm afraid the author may have bought into the media framing of what matters.

[john]

I left out a "but":

HRC's negatives are not a cavalier attitude toward security protocol, but eager interventionism (currently trying to get a flame going with Russia), and historical support for disastrous social institution changes.

[Rev. Spooner]

@From Arse to Elbow, "Classified simply means it is an official record..." That's not my understanding from numerous media reports of what she was likely to have had in work emails given her role at the time, and isn't the normally accepted use of the term "Classified" in the USA.

[efcdons]

Everybody, do not read Kevin Drum. He is the worst.

1. Everybody's doin' it defense. When Colin Powell runs for President then his use of a private server will come under tougher scrutiny.

2. Clinton avoided FOIA by sending all emails to the private server. If she wasn't trying to avoid FOIA for business emails she has a funny way of setting things up. Why not err the other way and have all emails go to the State Dept. server and flag the private emails later rather than send everything to private servers and flag the public emails later? Because it was easier, for avoiding FOIA, to do the latter.

3. Well, what a good reason. No one ever has carried two separate devices, it would be an intolerable burden /s. And usually when my boss tells me something is technically unfeasible (even if the reason is because their IT dept. is bad) I do what my boss requires. I don't just ignore the protocols because I don't like the requirements.

4. Probably. But even if nothing classified was hacked from her server or improperly revealed it was dumb to breach protocol because if something happened Clinton was entirely at fault and she wouldn't be able to point to the fact she did everything she could to prevent it from happening by following the set protocols. It's a rather cavalier attitude for a lawyer to take.

Clinton has admitted what she did was stupid and (she claims) if she had to do it again she would not have set up the private server. Why is there such a concerted attempt to make it seem like nothing when it was at the very least negligent and done out of a desire for convenience without regard to the possible consequences and at worst a deliberate attempt to deny the American people the legal right to fully examine Clinton's public correspondence? Especially the "GOP did it too" defense. Comparing Clinton to the worst administration in recent history (GWB and his office's purge of millions of emails) isn't very comforting.

[laurie gravelines]

Are we confident that USA gov computer servers are more secure than Hillary's private sector secured server? Bottom line it may be more of a process issue than "national security".

[reason]

efcdons
Kevin Drum is the worst what exactly - and by what measure?
And there is absolutely no evidence she was trying to breach FOI. Remember that every email from an email address on the state server or copied to an address email would be stored there. So a very small proportion of her "business" emails would not be stored at some point of the trail on the state server. If she was trying to avoid this, this was a stupid way to go about it. Remember she is 69, she liked doing things that she was familiar with and the way offered to her seemed too much trouble to her. In many ways I can sympathize (as a fellow human being). Maybe you should try a bit of compassion some day, you might like it.