Who is better at predicting: the expert or the novice or someone else? Intuitively people believe experts. But science tells us a very different story. And Brexit provides some startling evidence in support.
When forecasting "... experts performed worse ... than dart-throwing monkeys" 2001 Nobel Laureate Professor Daniel Kahnemann explains in "Thinking, fast and slow" [pps 218-221].
This simple conclusion, grounded in statistics [assumed randomness of dart-throwing monkeys], is the result of Professor Philip Tetlock's 20 year research project covering 80,000 predictions of 284 experts all explained in his book "Expert Political Judgment: How Good Is It? How Can We Know?".
Part of the explanation is the illusion created by experts who provide credible explanations of past events. Experts gain credibility with the public from such explanations. We thus believe their forecasts when we should be highly skeptical.
So the most serious questions for all to consider are:
Nobel Laureate Professor Daniel Kahnemann explains:
"The illusion that we understand the past fosters overconfidence in our ability to predict the future."
Experts have been busy predicting what will happen if and when the UK leaves the European Union. And Remainers, including of course politicians who oppose Brexit and many in the media have been wheeling out the experts to tell us all what a disaster it is going to be unless we remain.
So we need to look to what the science tells us about the reliability of expert predictions.
Science tells us that:
"specialists are not significantly more reliable than non-specialists in guessing what is going to happen ..... Knowing a little might make someone a more reliable forecaster, but .. knowing a lot can actually make a person less reliable."
"Everybody's an Expert - Putting predictions to the test." A review by Louis Menand of Professor Philip Tetlock's Book "Expert Political Judgment: How Good Is It? How Can We Know?"
If experts know better how does science explain this howler by HM Treasury under former Chancellor George Osborne, which became a major part of "Project Fear" in the days and weeks leading to the 23rd June 2016 Brexit Referendum.
The predicted disaster to follow a leave vote did not happen and in over three years since it has still not happened:
May 2016 HM Treasury analysis: the immediate economic impact of leaving the EU
"This paper focuses on the immediate economic impact of a vote to leave and the two years that follow. ....The Treasury analysis in this document uses a widely-accepted modelling approach .... one of our country's foremost economists and a former Deputy Governor of the Bank of England, ...... says that it "provides reasonable estimates of the likely size of the short-term impact of a vote to leave on the UK economy".
The analysis .... comes to a clear central conclusion: a vote to leave would represent an immediate and profound shock to our economy. That shock would push our economy into a recession and lead to an increase in unemployment of around 500,000, GDP would be 3.6% smaller, average real wages would be lower, inflation higher, sterling weaker, house prices would be hit and public borrowing would rise compared with a vote to remain."
"The idea that the future is unpredictable is undermined every day by the ease with which the past is explained. ... our tendency to construct and believe coherent narratives of the past makes it difficult for us to accept the limits of our forecasting ability. Everything makes sense in hindsight, a fact that financial pundits exploit every evening as they offer convincing accounts of the day's events. And we cannot suppress the powerful intuition that what makes sense in hindsight today was predictable yesterday.
