It occurred to me this morning that, if it's actually valuable, generating true beliefs about the world must be someone's comparative advantage. If truth is instrumentally important, important people must be finding ways to pay to access it. I can think of several examples of this, but the one that caught my attention was actuarial science.
I know next to nothing about what actuaries actually do, but Wikipedia says:
"Actuaries mathematically evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events."
Why, that sounds right up our alley.
So what I'm wondering is: for those who can afford it, wouldn't it be worth contracting with actuaries to make important personal decisions? Not merely with regards to business, but everything else as well? My preliminary ideas include:
- Lifestyle choices to reduce personal risk of death
- Health and wellness decisions
- Vehicle choice for economic and safety considerations
- Where to send your kid to college and otherwise improve life success
I am an (almost qualified) actuary, working for a life insurance company.
I would love it if I had data of a very high quality. However, most insurance companies can't use population statistics because of differences with underwriting standards (we don't cover the very bad risks), target markets (we advertise in the Daily Slum, so only cover low socioeconomic classes, for example), and claim definitions (what is a disease in the population might not be a claim for the insurance company). So we use our own experience to modify the population stats. Very large companies might use entirely their own data.
Generally, there is not enough of it to be sure that it's totally credible, especially when it comes to fine differences such as how much you smoke or drink. And that's ignoring problems like non-disclosure. Age and Sex are easier, but there's not much you can do about changing those, so it doesn't help with the question at hand.
Of course, for some types of insurance, such as compulsory car insurance, there is more data to work with - I've never worked in general insurance, so I can't comment on that.