IMO many people don’t understand the difference between a hallucination, an illusion, and psychosis. Also many people assume that severe mental illness like schizophrenia is a requirement for hallucinations.
This misunderstanding causes both believers and skeptics to overlook the possibility that a person who saw a UFO, bigfoot, etc. simply experienced a hallucination.
Here is an example from personal experience: I was depressed and found myself browsing classic UFO reports obsessively for several weeks. Then one afternoon I looked out my glass door and saw an apparent flying saucer slowly crossing the sky. It was too small to photograph, but I hurriedly dug out my camera in hopes that I could use the zoom lens to see it better. I went back to the door and the flying saucer was still slowly crossing the sky. I stooped over to pick up the camera, but suddenly the flying saucer was gone. I had an eerie feeling that the aliens were somehow aware of me and didn’t want to risk being photographed. A few days later I decided to make a report for MUFON in case somebody else had reported this same flying saucer - that way my report would lend credibility to their report. The investigator from MUFON interviewed me by phone, and I’m sure I sounded like a sane honest person who saw something real in the sky.
Recently I’ve learned more about hallucinations. So in retrospect I think my UFO sighting was probably a hallucination. (Incidentally my flying saucer looked very similar to a 1950s photograph that has always fascinated me - isn’t that a coincidence? 
)
Here is another example:
Imagine a radar operator working late at night in the 1950s focusing for many hours on his radar scope while it constantly sweeps circles. This sort of sensory deprivation and monotony is ideal for generating hallucination. So imagine the radar operator hallucinates a blip on his radar doing impossible feats. Maybe he even calls somebody else to look and persuades that person that something real is happening.
So the next step is to scramble a jet to investigate the blip. The jet pilot is nervous because he doesn’t know if this might be a flying saucer or even the beginning of WWIII. So he’s scanning the monotonous sky where the radar blip was reported and might be fooled by an optical illusion.
Now there is seemingly unexplainable radar and visual UFO sighting triggered by one sane person’s hallucination.
I agree with your points here, ufo. One doesn’t have to be prone to having psychotic episodes (with hallucinations and delusions) in their waking state, in order to have a hallucination during the hypnagogic state (the state in between being awake and asleep). It can and has happened to a significant portion of the population. The proposed radar operator in your example could have had a hynagogic hallucination, then awakened fully, thinking he had experienced something that had actually happened, and the scenario plays out from there.
There are a number of atypical physical states that can result in someone having a hallucination, delusion, and/or confused and disorganized thinking. Persons who have schizophrenia are definitely not the only ones who can experience these forms of psychoses. And almost everyone can experience an illusion, even in their everyday typical state of consciousness.
Drive a long straight highway on a hot, dry, summer day in Texas, I can just about guarantee that you, or anyone else, will see water on the highway in the distance. (Even if you are quite comfortable and happy in your air conditioned car.)
The highway up ahead in the distance, is in fact, as dry as a bone. What one is visually misinterpreting to be water, is, actually, the heat waves emanating from the pavement. This, then, is an example of an illusion.
I agree with your points here, ufo. One doesn't have to be prone to having psychotic episodes (with hallucinations and delusions) in their waking state, in order to have a hallucination during the hypnagogic state (the state in between being awake and asleep). It can and has happened to a significant portion of the population. The proposed radar operator in your example could have had a hynagogic hallucination, then awakened fully, thinking he had experienced something that had actually happened, and the scenario plays out from there. There are a number of atypical physical states that can result in someone having a hallucination, delusion, and/or confused and disorganized thinking. Persons who have schizophrenia are definitely not the only ones who can experience these forms of psychoses. And almost everyone can experience an illusion, even in their everyday typical state of consciousness.Most ufologists think that radar/visual sightings are excellent evidence. But I recently realized that radar equipment before the 1990s probably could not record the radar signal, so it is susceptible to hallucination and illusion. And if the first UFO observer initiates observations from other people then these are not really independent observations. The second observer such as another radar operator or a pilot sent to investigate the sighting knows he is supposed to see something.
When you talk to paranormal buffs and you suggest they may have just had a hallucination, they get very defensive. They seem to think they’d “know” if they were hallucinating, as if a hallucination were some kind of MontyPython figure appearing in the clouds that would be easily recognized. They don’t seem to get that the whole point of a hallucination is that it looks REAL!
When you talk to paranormal buffs and you suggest they may have just had a hallucination, they get very defensive. They seem to think they'd "know" if they were hallucinating, as if a hallucination were some kind of MontyPython figure appearing in the clouds that would be easily recognized. They don't seem to get that the whole point of a hallucination is that it looks REAL!Exactly :) Sometimes hallucinations are so weird that the person knows it isn't real, but other times the hallucination is more plausible. The other misconception about hallucinations is their association with psychosis. A perfectly sane person can have a hallucination. Depending how hallucination is defined. about 10% of the population has experienced a hallucination. Usually sleep deprivation, grief, etc. facilitate the hallucination, but sometimes there is no obvious cause. IMO, skeptics are just as likely as believers to discount the possibility of a hallucination, because these misconceptions are so common.