The Truthiness About Catastrophe Models

TruthinessDefJessica Weinkle of the University of North Carolina-Wilmington and I have a new paper in press with Science, Technology & Human Values. Here are the details:

The Truthiness About Hurricane Catastrophe Models

Science Technology & Human Values (in press)

29 August 2016

Jessica Weinkle, University of North Carolina-Wilmington

Roger Pielke, Jr., University of Colorado. Boulder

 

Abstract

In recent years, US policymakers have faced persistent calls for the price of flood and hurricane insurance cover to reflect the true or real risk. The appeal to a true or real measure of risk is rooted in two assumptions.  First, scientific research can provide an accurate measure of risk.  Second, this information can and should dictate decision making about the cost of insurance.  As a result, contemporary disputes over the cost of catastrophe insurance coverage, hurricane risk being a prime example, become technical battles over estimating risk. Using examples from the Florida hurricane ratemaking decision context we provide a quantitative investigation of the integrity of these two assumptions.  We argue that catastrophe models are politically stylized views of the intractable problem of precise characterization of the science of hurricane risk.  Faced with many conflicting scientific theories, model theorists use choice and preference for outcomes to develop a model.  Models therefore come to include political positions on relevant knowledge and the risk that society ought to manage.  Earnest consideration of model capabilities and inherent uncertainties may help evolve public debate from one focused on a  “true” or “real” measure of risk, of which there are many, towards one of improved understanding and management of insurance regimes.

Please contact me if you’d like an advance copy.

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