In response to my post, Michael Fumento has offered a bet: 10 to 1 odds on a pandemic in the next year. That means that Fumento thinks that there is a 10% of a pandemic in the next year. This sits rather oddly with his dismissal of concerns about bird flu. With a 10% chance of a pandemic, surely significant efforts to prepare are justified?
With three pandemics in the last century, you would expect any given year to have a 3% chance of a pandemic, so Fumento's 10% number suggests that he thinks the risk is seriously elevated. The market at the Foresight Exchange estimates that there is a 30% chance of a pandemic in the next three years, so Fumento's 10% in one year is in line with the market.
Anyway, Fumento wants to bet with me, so I've suggested to Intrade that they create a contract on a flu pandemic in 2007. This will let him bet with me and anyone else interested.
10/1 odds means 1 chance of winning and 10 of losing so 1 chance in 11 events = 9.09%. If you're betting you should at least get it right!