by Cathy O'Neil
a butterfly’s diet was “Kosher”: Stephen Baker, “After ‘Jeopardy,’ ” Boston Globe, February 15, 2011, www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/02/15/after_jeopardy/.
labeled them as gorillas: Alistair Barr, “Google Mistakenly Tags Black People as ‘Gorillas,’ Showing Limits of Algorithms,” Wall Street Journal, July 1, 2015, http://blogs.wsj.com/digits/2015/07/01/google-mistakenly-tags-black-people-as-gorillas-showing-limits-of-algorithms/.
Facebook, for example, has patented: Robinson Meyer, “Could a Bank Deny Your Loan Based on Your Facebook Friends?,” Atlantic Monthly, September 25, 2015, www.theatlantic.com/technology/archive/2015/09/facebooks-new-patent-and-digital-redlining/407287/.
American Express learned this the hard way: Ron Lieber, “American Express Kept a (Very) Watchful Eye on Charges,” New York Times, January 30, 2009, www.nytimes.com/2009/01/31/your-money/credit-and-debit-cards/31money.html.
Douglas Merrill’s idea: Steve Lohr, “Big Data Underwriting for Payday Loans,” New York Times, January 19, 2015, http://bits.blogs.nytimes.com/2015/01/19/big-data-underwriting-for-payday-loans/.
On the company web page: Website ZestFinance.com, accessed January 9, 2016, www.zestfinance.com/.
A typical $500 loan: Lohr, “Big Data Underwriting.”
ten thousand data points: Michael Carney, “Flush with $20M from Peter Thiel, ZestFinance Is Measuring Credit Risk Through Non-traditional Big Data,” Pando, July 31, 2013, https://pando.com/2013/07/31/flush-with-20m-from-peter-thiel-zestfinance-is-measuring-credit-risk-through-non-traditional-big-data/.
one of the first peer-to-peer exchanges, Lending Club: Richard MacManus, “Facebook App, Lending Club, Passes Half a Million Dollars in Loans,” Readwrite, July 29, 2007, http://readwrite.com/2007/07/29/facebook_app_lending_club_passes_half_a_million_in_loans.
received funding a year later: Lending Club, “Lending Club Completes $600 Million SEC Registration and Offers New Alternative for Consumer Credit,” Lending Club, October 14, 2008, http://blog.lendingclub.com/lending-club-sec-registration/.
less than $10 billion in loans: Peter Renton, “Five Predictions for 2015,” Lend Academy, January 5, 2015, www.lendacademy.com/five-predictions-2015/.
Executives from Citigroup: Nav Athwal, “The Disappearance of Peer-to-Peer Lending,” Forbes, October 14, 2014, www.forbes.com/sites/groupthink/2014/10/14/the-disappearance-of-peer-to-peer-lending/.
Wells Fargo’s investment fund: Maureen Farrell, “Wells Fargo Is a Big Winner in Lending Club IPO,” Wall Street Journal, December 12, 2014, http://blogs.wsj.com/moneybeat/2014/12/12/wells-fargo-is-a-big-winner-in-lending-club-ipo/.
the biggest tech IPO: Jeremy Quittner, “The 10 Biggest IPOs of 2014,” Inc., December 19, 2014, www.inc.com/jeremy-quittner/biggest-ipos-of-2014.html.
It raised $870 million: Neha Dimri, “Update 1—Online Lender LendingClub Profit Beats Street as Fees Jump,” Reuters, May 5, 2015, www.reuters.com/article/lendingclub-results-idUSL4N0XW4HO20150505.
a report in Forbes: Athwal, “Disappearance of Peer-To-Peer Lending.”
CHAPTER 9
Hoffman, a German: Megan Wolff, “The Myth of the Actuary: Life Insurance and Frederick L. Hoffman’s ‘Race Traits and Tendencies of the American Negro,’ ” Public Health Reports 121, no. 1 (January/February 2006): 84–91, www.ncbi.nlm.nih.gov/pmc/articles/PMC1497788/.
Insurance companies as well as bankers: Gregory Squires, “Insurance Redlining: Still Fact, Not Fiction,” Shelterforce 79 (January/February 1995), www.nhi.org/online/issues/79/isurred.html.
the Fair Housing Act of 1968: Fair Housing Laws and Presidential Executive Orders, US Department of Housing and Urban Development, accessed January 9, 2016, http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws.
Insurance grew out of actuarial science: Chris Lewin, “The Creation of Actuarial Science,” Zentralblatt für Didaktik der Mathematik 33, no. 2 (April 2001): 61–66, http://link.springer.com/article/10.1007%2FBF02652740.
John Graunt: Margaret De Valois, “Who Was Captain John Graunt?,” Actuary, September 2000, 38–39, www.theactuary.com/archive/old-articles/part-3/who-was-captain-john-graunt-3F/.
the first study of the mortality rates: John Graunt, Bills of Mortality (1662), www.neonatology.org/pdf/graunt.pdf.
a 6 percent death risk: De Valois, “Who Was Captain John Graunt?”
researchers at Consumer Reports: “The Truth About Car Insurance,” Consumer Reports, Special Report, accessed January 10, 2016, www.consumerreports.org/cro/car-insurance/auto-insurance-special-report/index.htm.
And in Florida, adults with clean driving records: Jeff Blyskal, “Secrets of Car Insurance Prices,” Consumer Reports, July 30, 2015, www.consumerreports.org/cro/magazine/2015/07/car-insurance-prices/index.htm.
Consumer Federation of America: Don Jergler, “Price Optimization Allegations Challenged, NAIC Investigating Practice,” Insurance Journal, December 18, 2014, www.insurancejournal.com/news/national/2014/12/18/350630.htm.
Wisconsin Department of Insurance: “CFA Rips Allstate’s Auto Insurance Pricing,” Corporate Crime Reporter, December 16, 2014, www.corporatecrimereporter.com/news/200/cfa-rips-allstates-auto-insurance-pricing-policy/.
“Allstate’s insurance pricing has become untethered”: Ellen Jean Hirst, “Allstate, Other Insurers Accused of Unfairly Pricing Premiums,” Chicago Tribune, December 16, 2014, www.chicagotribune.com/business/ct-allstate-insurance-risk-premiums-1217-biz-20141216-story.html.
“consistent with industry practices”: Mitch Lipka, “Watchdog: Allstate Auto Insurance Pricing Scheme Is Unfair,” Daily Finance, December 16, 2014, www.dailyfinance.com/2014/12/16/allstate-auto-insurance-pricing-scheme-unfair/.
its own Twitter campaign: “Consumer Reports Digs into Car Insurance Quote Secrecy, Prices Are Rife with Inequities and Unfair Practices,” Clarksville Online, August 6, 2015, www.clarksvilleonline.com/2015/08/06/consumer-reports-digs-into-car-insurance-quote-secrecy-prices-are-rife-with-inequities-and-unfair-practices/.
Swift Transportation: David Morris, “There’s Pressure in the Industry to Monitor Truck Drivers—and Drivers Aren’t Happy,” Fortune, May 26, 2015, http://fortune.com/2015/05/26/driver-facing-truck-cameras/.
About seven hundred truckers die: Centers for Disease Control and Prevention, “Crashes Are the Leading Cause of on-the-Job Death for Truck Drivers in the US,” press release, March 3, 2015, www.cdc.gov/media/releases/2015/p0303-truck-driver-safety.html.
The average cost of a fatal crash: Morris, “There’s Pressure.”
And they use this data: Karen Levy, “To Fight Trucker Fatigue, Focus on Economics, Not Electronics,” Los Angeles Times, July 15, 2014, www.latimes.com/opinion/op-ed/la-oe-levy-trucker-fatigue-20140716-story.html.
Progressive, State Farm, and Travelers: Mark Chalon Smith, “State Farm’s In-Drive Discount: What’s the Catch?,” CarInsurance, June 12, 2015, www.carinsurance.com/Articles/state-farm-in-drive-discount.aspx.
They get rewarded with a discount: Ibid.
data company called Se
nse Networks: Stephen Baker, “Mapping a New, Mobile Internet,” Bloomberg, February 25, 2009, www.bloomberg.com/bw/stories/2009-02-25/mapping-a-new-mobile-internet.
“We wouldn’t necessarily recognize”: Greg Skibiski and Tony Jebara, in-person interview by Stephen Baker, February, 2009.
Sense was sold in 2014 to YP: Anthony Ha, “In Its First Acquisition, YP Buys Mobile Ad Company Sense Networks,” TechCrunch, January 6, 2014, http://techcrunch.com/2014/01/06/yp-acquires-sense-networks/.
the Internal Revenue Service tweaked the tax code: Congressional Budget Office, “The Tax Treatment of Employment-Based Health Insurance,” March 1994, www.cbo.gov/sites/default/files/103rd-congress-1993-1994/reports/1994_03_taxtreatmentofinsurance.pdf.
about 9 percent of American workers: Alex Blumberg and Adam Davidson, “Accidents of History Created U.S. Health System,” NPR, October 22, 2009, www.npr.org/templates/story/story.php?storyId=114045132.
65 percent of Americans: Ibid.
$3 trillion per year: Chad Terhune, “U.S. Health Spending Hits $3 Trillion as Obamacare and Rising Drug Costs Kick In,” Los Angeles Times, December 2, 2015, www.latimes.com/business/healthcare/la-fi-health-spending-increase-20151202-story.html.
Nearly one dollar of every five: Scott Thomas, “Nation’s Total Personal Income Approaches $13 Trillion,” Business Journals, December 4, 2012, www.bizjournals.com/bizjournals/on-numbers/scott-thomas/2012/12/nations-total-personal-income.html.
The Affordable Care Act, or Obamacare: US Department of Labor, “The Affordable Care Act and Wellness Programs,” fact sheet, accessed January 9, 2016, www.dol.gov/ebsa/newsroom/fswellnessprogram.html.
as high as 50 percent of the cost of coverage: US Department of Labor, “Affordable Care Act.”
more than half of all organizations: Soeren Mattke, Hangsheng Liu, John Caloyeras, Christina Huang, Kristin Van Busum, Dmitry Khodyakov, and Victoria Shier, “Workplace Wellness Programs Study,” Rand Corporation Research Report, 2013, www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR254/RAND_RR254.sum.pdf.
the case of Aaron Abrams: Aaron Abrams, e-mail interview by author, February 28, 2015.
Anthem Insurance, which administers a wellness program: Washington and Lee Wellness Program, accessed January 9, 2016, www.wlu.edu/human-resources/wellness/evolve-wellness-program.
Michelin, the tire company: Leslie Kwoh, “When Your Boss Makes You Pay for Being Fat,” Wall Street Journal, April 5, 2013, www.wsj.com/articles/SB10001424127887324600704578402784123334550.
CVS announced in 2013: Ibid.
“Attention everyone, everywhere”: Alissa Fleck, “CVS Drugstore Chain Unveils New Employee Diet Plan: Fat-Shaming and a $600 Fine,” Bitch Media, March 21, 2013, https://bitchmedia.org/post/cvs-drugstore-chain-unveils-new-employee-diet-plan-fat-shaming-and-a-600-fine.
Lambert Adolphe Jacques Quetelet: Lily Dayton, “BMI May Not Be the Last Word on Health Risks, Some Experts Say,” Los Angeles Times, December 19, 2014, www.latimes.com/health/la-he-bmi-20141220-story.html.
Keith Devlin, the mathematician: Keith Devlin, “Top 10 Reasons Why The BMI Is Bogus,” NPR, July 4, 2009, www.npr.org/templates/story/story.php?storyId=106268439.
the $6 billion wellness industry: Rand Corporation, “Do Workplace Wellness Programs Save Employers Money?,” Rand Corporation Research Brief, 2013, www.rand.org/content/dam/rand/pubs/research_briefs/RB9700/RB9744/RAND_RB9744.pdf.
“Here are the facts”: Joshua Love, “4 Steps to Implement a Successful Employee Wellness Program,” Forbes, November 28, 2012, www.forbes.com/sites/theyec/2012/11/28/4-steps-to-implement-a-successful-employee-wellness-program/.
California Health Benefits Review Program: California Health Benefits Review Program, “Analysis of Senate Bill 189: Health Care Coverage: Wellness Programs,” report to the 2013–14 California Legislature, April 25, 2013, http://chbrp.ucop.edu/index.php?action=read&bill_id=149&doc_type=3.
2013 study headed by Jill Horwitz: Jill Horwitz, Brenna Kelly, and John Dinardo, “Wellness Incentives in the Workplace: Cost Savings Through Cost Shifting to Unhealthy Workers,” Health Affairs 32, no. 3 (March 2013): 468–76, doi: 10.1377/hlthaff.2012.0683.
CHAPTER 10
two-thirds of American adults: Andrew Perrin, “Social Media Usage: 2005–2015,” Pew Research Center, October 8, 2015, www.pewinternet.org/2015/10/08/social-networking-usage-2005-2015/.
thirty-nine minutes a day: Victor Luckerson, “Here’s How Facebook’s News Feed Actually Works,” Time, July 9, 2015, http://time.com/3950525/facebook-news-feed-algorithm/.
Nearly half of them: Michael Barthel, Elisa Shearer, Jeffrey Gottfried, and Amy Mitchell, “The Evolving Role of News on Twitter and Facebook,” Pew Research Center, July 14, 2015, www.journalism.org/2015/07/14/the-evolving-role-of-news-on-twitter-and-facebook/.
Facebook conducted experiments: Robert Bond, Christopher Fariss, Jason Jones, Adam Kramer, Cameron Marlow, Jaime Settle, and James Fowler, “A 61-Million-Person Experiment in Social Influence and Political Mobilization,” Nature 489 (September 13, 2012): 295–98, doi:10.1038/nature11421.
the quiet satisfaction of carrying out a civic duty: Alan Gerber, Donald Green, and Christopher Larimer, “Social Pressure and Voter Turnout: Evidence from a Large-Scale Field Experiment,” American Political Science Review 102, no. 1 (February 2008): 33–48, doi:10.1017/S000305540808009X.
inundate Washington with lobbyists: Derek Willis and Claire Cain Miller, “Tech Firms and Lobbyists: Now Intertwined, but Not Eager to Reveal It,” New York Times, September 24, 2014, www.nytimes.com/2014/09/25/upshot/tech-firms-and-lobbyists-now-intertwined-but-not-eager-to-reveal-it.html?_r=0.
their campaign had increased turnout by 340,000: Bond et al., “61-Million-Person Experiment.”
George W. Bush, after all, won in 2000 by a margin: David Barstow and Don Van Natta Jr., “Examining the Vote; How Bush Took Florida: Mining the Overseas Absentee Vote,” New York Times, July 15, 2001, www.nytimes.com/2001/07/15/us/examining-the-vote-how-bush-took-florida-mining-the-overseas-absentee-vote.html.
altered the news feed algorithm: Eytan Bakshy, Solomon Messing, and Lada Adamic, “Exposure to Ideologically Diverse News and Opinion,” Science 348, no. 6239 (May 7, 2015): 1130–32, doi:10.1126/science.aaa1160.
Lada Adamic, a computational social scientist: Lada Adamic, YouTube video from a talk titled “When Friends Deliver the Newspaper,” originally given at O’Reilly’s Foo Camp, November 25, 2013, accessed January 10, 2016, www.youtube.com/watch?v=v2wv-oVC9sE&list=UU0XEyA5oRIKnp7jkGrYw8ZQ—I.
Karrie Karahalios: Luckerson, “Here’s How.”
researchers experimented on 680,000 Facebook users: Adam Kramer, Jamie Guillory, and Jeffrey Hancock, “Experimental Evidence of Massive-Scale Emotional Contagion through Social Networks,” Proceedings of the National Academy of Sciences of the United States of America 111, no. 24 (June 2, 2014): 8788–90, doi: 10.1073/pnas.1320040111.
Two researchers: Robert Epstein and Ronald Robertson, “The Search Engine Manipulation Effect (SEME) and Its Possible Impact on the Outcomes of Elections,” Proceedings of the National Academy of Sciences of the United States of America 112, no. 33 (August 18, 2015): E4512–E4521, doi:10.1073/pnas.1419828112.
Some 73 percent of Americans: Kristin Purcell, Joanna Brenner, and Lee Rainie, “Search E
ngine Use 2012,” Pew Research Center, March 9, 2012, www.pewinternet.org/2012/03/09/search-engine-use-2012/.
he traveled to Boca Raton: Dave Gilson, “Who Was at Romney’s ‘47 Percent’ Fundraiser?,” Mother Jones, September 18, 2012, www.motherjones.com/mojo/2012/09/romney-47-percent-fundraiser-florida.
captured by a bartender: David Corn, “Meet Scott Prouty, the 47 Percent Video Source,” Mother Jones, March 13, 2013, www.motherjones.com/politics/2013/03/scott-prouty-47-percent-video.
very likely cost Romney any chance: Henry Blodget, “Bloomberg: Mitt Romney Just Lost the Election,” Business Insider, September 17, 2012, www.businessinsider.com/mitt-romney-just-lost-the-election-2012-9.
The Selling of the President: Joe McGinniss, The Selling of the President 1968 (New York: Trident Press, 1969).
Rayid Ghani posted an update: excerpted on Straight Dope Message Board, accessed January 9, 2016, http://boards.straightdope.com/sdmb/archive/index.php/t-617517.html.
heading up the data team for Obama’s campaign: Alexis Madrigal, “What the Obama Campaign’s Chief Data Scientist Is Up to Now,” Atlantic Monthly, May 8, 2013, www.theatlantic.com/technology/archive/2013/05/what-the-obama-campaigns-chief-data-scientist-is-up-to-now/275676/.
One of Ghani’s projects at Accenture: Chad Cumby, Andrew Fano, Rayid Ghani, and Marko Krema, “Predicting Customer Shopping Lists from Point-of-Sale Purchase Data,” paper presented at the Proceedings of the Tenth ACM SIGKDD International Conference on Knowledge Discovery and Data Mining, Seattle, 2004, doi:10.1145/1014052.1014098.
each campaign developed profiles of American voters: Sasha Issenberg, “How President Obama’s Campaign Used Big Data to Rally Individual Voters,” Technology Review, December 19, 2012, www.technologyreview.com/featuredstory/509026/how-obamas-team-used-big-data-to-rally-voters/.