(Thanks goes to Bob Simonson, my favorite econ professor, for inspiring the title of this post).
Anyone who’s taken introductory statistics can understand the difference between type 1 and type 2 errors in hypothesis testing. Type 1 errors are false positives – falsely rejecting the null hypothesis. On the other hand, type 2 errors are false negatives – accepting the null hypothesis when it’s actually false.
The textbook example usually involves medical testing. If a patient tested for a condition is actually not ill, but her test results come back positive, that’s a type 1 error; if she is ill, but the test is negative, it’s a type 2 (Wikipedia has a helpful chart). I’ve been thinking lately about how people make big life decisions. I think we might have a preference for type 1 errors over type 2.
“Innocent until proven guilty” explains a lot. Our court system is set up so that sometimes the guilty go free, but very few innocent people go to prison (we hope, anyway). Drug testing is designed to stop harmful drugs from getting on the market, and in the process also keeps some beneficial drugs from reaching patients. This makes perfect sense: people who die from taking a drug are more visible to us than people who die because they don’t have a drug to take. It’s politically impossible to take things away from people (see: Medicare, Social Security), and much easier to deprive them of things they haven’t yet received (by imposing higher taxes to cover ever-increasing program costs).
I’m curious if this (possible) preference carries over to other aspects of our lives. Do we choose “what is seen” over “what is not seen?” Part of my rationale for moving to Washington D.C., jobless and in the midst of a nasty recession, was that I didn’t want to end up settling down in Minnesota without first having tried making it out here. If it doesn’t work out, well shucks, at least I tried, and that’s better than wondering what could have been. Of course, this reasoning ignores the opportunities – not related to my still-undefined career – that I had back home which I may be giving up to be out here.
Is this why some people stay in bad relationships longer than they should? Or get into relationships despite early warning signs? Knowing with certainty whether this person is “the one?” Individual differences in risk-aversion likely also play a role, as well as certain individuals’ resistance to making decisions. A risk-averse person my favor type 1 errors, whereas a person easily overwhelmed by too many options might prefer to wait things out rather than make wrong the choices, favoring type 2 errors.
None of this changes the fact that, like it or not, the world is full of uncertainty (death and taxes being the only exceptions). It seems that the people who try to exert the most control over their lives are the people who are shaken up the most when life throws curve balls their way. Not-a-one of us has any clue what’s going to be right around the corner. Three years ago, I couldn’t imagine life after college, let alone ever living in Washington D.C. I’m obviously not the kind of person who sets ambitious life goals. Rather, I’ve always swam with life’s current, and while it probably won’t lead me to a law degree and a six-figure salary, it will (hopefully) take me across the paths of interesting knowledge, people and experiences.




















