Column: Risk Management

The Flaw of Averages

By: | September 1, 2013

Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected].

Is 3.5 inches of rainfall in two hours a lot of rain? Yes, if we consider that the average rainfall is 3 inches in a month. How then to describe a single-day rainfall that is 50 times the average?

That is exactly what meteorologists said happened in Toronto on July 9. The city logged 5 inches of rain, that day, breaking the previous single-day record set back on Oct. 15, 1954.

A storm targeted Toronto and hovered over the city, dumping buckets of water for hours. Preliminary damage has been reported by insurance experts to likely exceed $600 million.

The rain knocked out power to about 300,000 residents across the Toronto area, which has a population of 2.6 million.

It shut down subways, flooded thousands of basements and cars, forced people to cling to trees and left about 1,400 passengers stranded for hours on a commuter train filled with floodwaters up to the lower windows. And all this happened during the rush hour commute home.

Toronto’s infrastructure struggled to manage the storm runoff. Waist-deep waters accumulated on the streets and highways. Sewer covers vaulted into the air, creating gushing water spouts all around the city.

It was really quite something to experience. I was poised to swim home from work that day.

After the waters finally receded, the finger pointing started. Some argued this was a clear sign of global warming. Others said it was the fault of insufficient and poorly designed city infrastructure.

Some accused city planners of allowing over-urbanization in the city’s core, and some even argued that Toronto was being punished for something by a “higher authority.”

I am not sure who we should pin this flood on, or even if we need to. What I did find interesting, however, were uses of the word average.

It was as though people looked at an average as a comforting certainty with no real potential for deviation.

Take, for example, a group of 50 people on a bus. If I logged each adult’s height in inches, I can almost guarantee that the average height would come to be around 67 inches, or 5-foot-7.

To no one’s surprise, the world essentially designs most things to accommodate 5-foot-7 adults: the size of your car, length of your pants, leg room on a bus and the height of your counters. We needed a design proxy so we expressly chose to use an average.

But does that approach to bus seat measurement, for example, address the fact that 10 basketball players, each well past 6 feet tall, could end up sitting on my bus?

Of course not. The possibility of variation is more the issue. We need to see and possibly accept the risk in the numbers we routinely count on. We need to accept the variability in our assumptions.

Some have even stated that plans based on averages are frequently wrong.

As such, it is quite possible that designers of critical infrastructure, such as the electrical grid, water treatment plants, sewers and culverts, public transport and roads may need to shift their design standards to accommodate new weather extremes.

All talk about climate change aside, we can’t afford to ignore the very real variations in weather patterns.

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