The ontology of London house prices

The questions that preoccupy Philosophy students often cause them to be teased by their peers. In my case, ontology was the big hilarity, as we studied the history of philosophers asking, “how do we know that this chair actually exists?“. My science-studying friends ribbed me for examining something that was (in their eyes) completely futile. I do not have the wit to explain to them that the same thought processes should lead us to examine whether other things could also be trusted to exist—scientific data, for example.
Discussion around house prices has flared again. Right Move have published data showing that house prices in London and its orbit have risen 2% in the past quarter, and 10% in the past month alone. (These figures seem so extraordinary I wonder if we need a freshman philosophy student to ask whether they actually exist!  Meanwhile, Right Move calls them ‘unsustainable‘)
We know that house prices do not really exist in the same way that our chairs exist. They are constructs of human interaction, a rough guess at the point of intersection on a supply-and-demand graph that no-one actually gets to see. Continue reading “The ontology of London house prices”

The Irrationality of EuroMillions

Away from the Olympics, there has been a massive rush for lottery tickets ahead of tonight’s £105 Million Euromillions Draw.
Its not really new or interesting to point out how irrational playing the lottery is.  Playing the lottery is often called “a tax on stupid people”.  It is not only irrational in the sense that people pin their hopes on something extremely unlikely to happen, but also economically irrational.  The ‘expected return’ (a function of the probability and the amount invested) is much less than other types of gambling too.  The odds of winning the UK lottery jackpot are 13,913,816 to one, which suggests thatyou should win at least £13,913,816 on a £1 stake, should your six numbers come up.  Instead, the lottery jackpots are usually much lower (typically about £2 million).  That’s like getting only £15 winnings after putting a quid on a 100/1 horse at the Grand National!
However, playing the UK lottery does become economically rational if the rollover jackpot goes over £14 million, because then you’re actually taking a bet with a better return than the odds would suggest.  This happened frequently in the past, though less so in recent years as the popularity of the Lotto decreases.
There’s no such benefit with EuroMillions however. The odds are one in 95,344,200, and the price of a ticket is £2 in the UK.  That means it is only economically rational to play EuroMillions when the jackpot is £190 million or more.  This has not happened yet.  the biggest win so far was £161 million. In fact, rules for that lottery cap the jackpot at €185 million.