Predictive Models Dominate Our Lives — Not Always For The Better

  • Date: 07/05/20
  • Merrill Matthews, The Hill

The vast majority of Americans are completely unaware of how much models that predict the future of the economy and the climate – and now disease – dominate our lives.

There’s no escaping their reach. Those models drive many of our public policy debates and much of the major legislation passed by Congress. 

That might not be so bad if the models’ predictions were generally accurate. But they aren’t. Indeed, they are often wildly wrong.

As the late statistician Prof. George E. P. Box warned us: “All models are wrong, but some are useful.”

I have worked with people who develop models over the years, mostly relating to economic policy. They were conscientious modelers, dedicated to developing a model that would reasonably estimate the economic impact of various laws and policies.

That’s when the models can be useful, but not all are.

All models are built on a multitude of assumptions, and many of those assumptions increasingly reflect the ideological and political views of the modelers. If the assumptions are skewed, so will be a model’s predictions. […]

Take the constant barrage of climate model predictions. 

Environmentalists, the left and most of the media accuse skeptics of being “climate deniers.” But what many on the right are skeptical of isn’t actual scientific data, but some climate models’ predictions of temperatures and sea level rise 50 or 100 years in the future. 

And yet the media regularly conflate the two. If you don’t believe the predictions of a climate model then you are denying the science, when what’s actually being questioned is many of the assumptions built into the model.

Here’s an example. Nearly all climate models in the late 1990s and early 2000s greatly overestimated rising temperatures because they didn’t take into account what’s now known as the “warming hiatus” that lasted about 14 years – from about 1998 to 2012 – when global temperatures remained relatively flat. 

In other words, the actual data did not match the models’ predictions, which left climate modelers and environmentalists scrambling to explain the discrepancies.

To be sure, the earth has been on a gradual warming trend since the end of the ice age — and no one asserts the ice age ended because of human activity. The earth appears likely to continue warming for the foreseeable future, and humans may be exacerbating that warming.

But no climate model is sophisticated enough to know the temperature or sea level 50 or 100 years from now — especially since countless variables, including innovation, may fundamentally change.

And yet leftists and environmentalists want us to dramatically alter the economy and our way of life – e.g., through the Green New Deal – based on predictions that might, but probably won’t, be correct.

And speaking of predictions that aren’t correct, can we talk about those coronavirus pandemic models? A new National Bureau of Economic Research (NBER) working paper highlights just how influential – and wrong – some of the pandemic models have been.

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