Front Page Titles (by Subject) Uncertainty of Future Events. - The Theory of Political Economy
The Online Library of Liberty
A project of Liberty Fund, Inc.
Uncertainty of Future Events. - William Stanley Jevons, The Theory of Political Economy 
The Theory of Political Economy (London: Macmillan, 1888) 3rd ed.
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The text is in the public domain.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Uncertainty of Future Events.
In admitting the force of anticipated feeling, we are compelled to take account of the uncertainty of all future events. We ought never to estimate the value of that which may or may not happen as if it would certainly happen. When it is as likely as not that I shall receive £100, the chance is worth but £50, because if, for a great many times in succession, I purchase the chance at this rate, I shall almost certainly neither lose nor gain. The test of correct estimation of probabilities is that the calculations agree with fact on the average. If we apply this rule to all future interests, we must reduce our estimate of any feeling in the ratio of the numbers expressing the probability of its occurrence. If the probability is only one in ten that I shall have a certain day of pleasure, I ought to anticipate the pleasure with one-tenth of the force which would belong to it if certain. In selecting a course of action which depends on uncertain events, as, in fact, does everything in life, I should multiply the quantity of feeling attaching to every future event by the fraction denoting its probability. A great casualty, which is very unlikely to happen, may not be so important as a slight casualty which is nearly sure to happen. Almost unconsciously we make calculations of this kind more or less accurately in all the ordinary affairs of life; and in systems of life, fire, marine, or other insurance, we carry out the calculations to great perfection. In all industry directed to future purposes, we must take similar account of our want of knowledge of what is to be.
THEORY OF UTILITY