Risk perception
Encyclopedia
Risk perception is the subjective judgment that people make about the characteristics and severity of a risk
. The phrase is most commonly used in reference to natural hazards and threats to the environment
or health
, such as nuclear power
. Several theories have been proposed to explain why different people make different estimates of the dangerousness of risks. Three major families of theory have been developed: psychology approaches (heuristics and cognitive), anthropology/sociology approaches (cultural theory) and interdisciplinary approaches (social amplification of risk framework).
The mid 1960’s saw the rapid rise of nuclear technologies and the promise for clean and safe energy. However, public perception shifted against this new technology. Fears of both longitudinal dangers to the environment as well as immediate disasters creating radioactive wastelands turned the public against this new technology. The scientific and governmental communities asked why public perception was against the use of nuclear energy when all of the scientific experts were declaring how safe it really was. The problem, from the perspectives of the experts, was a difference between scientific facts and an exaggerated public perception of the dangers .
A key early paper was written in 1969 by Chauncey Starr
. Starr used a revealed preference
approach to find out what risks are considered acceptable by society. He assumed that society had reached equilibrium in its judgment of risks, so whatever risk levels actually existed in society were acceptable. His major finding was that people will accept risks 1,000 greater if they are voluntary (e.g. driving a car) than if they are involuntary (e.g. a nuclear disaster).
This early approach assumed that individuals behave in a rational manner, weighing information before making a decision. Individuals have exaggerated fears due to inadequate or incorrect information. Implied in this assumption is that additional information can help people understand true risk and hence lessen their opinion of danger . While researchers in the engineering school did pioneer research in risk perception, by adapting theories from economics, it has little use in a practical setting. Numerous studies have rejected the belief that additional information, alone, will shift perceptions .
and Amos Tversky
, who performed a series of gambling experiments to see how people evaluated probabilities. Their major finding was that people use a number of heuristics to evaluate information. These heuristics are usually useful shortcuts for thinking, but they may lead to inaccurate judgments in some situations – in which case they become cognitive bias
es.
- insensitivity to prior probability
- insensitivity to sample size
- misconception of chance (gambler fallacy)
- insensitivity to predictability
- illusion of validity
- misconception of regression
- biases due to retrievability of instances
- biases due to the effectivenss of research set
- biases of imaginability
- illusiory correlation
- insufficient adjustment
- biases in the evaluation of conjunctive and disjunctive event
- anchoring in the assessment of subjective probability distributions
Another key finding was that the experts are not necessarily any better at estimating probabilities than lay people. Experts were often overconfident in the exactness of their estimates, and put too much stock in small samples of data.
have been among the key researchers here. These researchers first challenged Starr's article by examining expressed preference
– how much risk people say they are willing to accept. They found that, contrary to Starr's basic assumption, people generally saw most risks in society as being unacceptably high. They also found that the gap between voluntary and involuntary risks was not nearly as great as Starr claimed.
Slovic and team found that perceived risk is quantifiable and predictable. People tend to view current risk levels as unacceptably high for most activities. All things being equal, the greater people perceived a benefit, the greater the tolerance for a risk. If a person derived pleasure from using a product, people tended to judge its benefits as high and its risks as low. If the activity was disliked, the judgments were opposite. Research in psychometrics has proven that risk perception is highly dependent on intuition, experiential thinking, and emotions.
Psychometric research identified a broad domain of characteristics that may be condensed into three high order factors: 1) the degree to which a risk is understood, 2) the degree to which it evokes a feeling of dread, and 3) the number of people exposed to the risk. A dread risk elicits visceral feelings of terror, uncontrollable, catastrophe, inequality, and uncontrolled. An unknown risk is new and unknown to science. The more a person dreads an activity, the higher its perceived risk and the more that person wants the risk reduced .
" (with capital C and T). Cultural Theory is based on the work of anthropologist Mary Douglas
and political scientist Aaron Wildavsky
first published in 1982.
In Cultural Theory, Douglas and Wildavsky outline four “ways of life” in a grid/group arrangement. Each way of life corresponds to a specific social structure and a particular outlook on risk. Grid categorizes the degree to which people are constrained and circumscribed in their social role. The tighter binding of social constraints limits individual negotiation. Group refers to the extent to which individuals are bounded by feelings of belonging or solidarity. The greater the bonds, the less individual choice are subject to personal control. Four ways of life include: Hierarchical, Individualist, Egalitarian, and Fatalist.
Risk perception researchers have not widely accepted Cultural theory. Even Douglas says that the theory is controversial; it poses a danger of moving out of the favored paradigm of individual rational choice of which many researchers are comfortable.
The framework attempts to explain the process by which risks are amplified, receiving public attention, or attenuated, receiving less public attention. The framework may be used to compare responses from different groups in a single event, or analyze the same risk issue in multiple events. In a single risk event, some groups may amplify their perception of risks while other groups may attenuate, or decrease, their perceptions of risk.
The main thesis of SARF states that risk events interact with individual psychological, social and other cultural factors in ways that either increase or decrease public perceptions of risk. Behaviors of individuals and groups then generate secondary social or economic impacts while also increasing or decreasing the physical risk itself .
These ripple effects caused by the amplification of risk include enduring mental perceptions, impacts on business sales, and change in residential property values, changes in training and education, or social disorder. These secondary changes are perceived and reacted to by individuals and groups resulting in third-order impacts. As each higher-order impacts are reacted to, they may ripple to other parties and locations. Traditional risk analyses neglect these ripple effect impacts and thus greatly underestimate the adverse effects from certain risk events. Public distortion of risk signals provides a corrective mechanism by which society assesses a fuller determination of the risk and its impacts to such things not traditionally factored into a risk analysis.
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
. The phrase is most commonly used in reference to natural hazards and threats to the environment
Environment (biophysical)
The biophysical environment is the combined modeling of the physical environment and the biological life forms within the environment, and includes all variables, parameters as well as conditions and modes inside the Earth's biosphere. The biophysical environment can be divided into two categories:...
or health
Health
Health is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...
, such as nuclear power
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
. Several theories have been proposed to explain why different people make different estimates of the dangerousness of risks. Three major families of theory have been developed: psychology approaches (heuristics and cognitive), anthropology/sociology approaches (cultural theory) and interdisciplinary approaches (social amplification of risk framework).
Early theories
The study of risk perception arose out of the observation that experts and lay people often disagreed about how risky various technologies and natural hazards were.The mid 1960’s saw the rapid rise of nuclear technologies and the promise for clean and safe energy. However, public perception shifted against this new technology. Fears of both longitudinal dangers to the environment as well as immediate disasters creating radioactive wastelands turned the public against this new technology. The scientific and governmental communities asked why public perception was against the use of nuclear energy when all of the scientific experts were declaring how safe it really was. The problem, from the perspectives of the experts, was a difference between scientific facts and an exaggerated public perception of the dangers .
A key early paper was written in 1969 by Chauncey Starr
Chauncey Starr
Chauncey Starr was an American electrical engineer who was an expert in nuclear energy.Born in Newark, New Jersey, Starr received an electrical engineering degree in 1932 and a Ph.D. in physics in 1935 from Rensselaer Polytechnic Institute.Starr was Vice President of Rockwell International and...
. Starr used a revealed preference
Revealed preference
Revealed preference theory, pioneered by American economist Paul Samuelson, is a method by which it is possible to discern the best possible option on the basis of consumer behavior. Essentially, this means that the preferences of consumers can be revealed by their purchasing habits...
approach to find out what risks are considered acceptable by society. He assumed that society had reached equilibrium in its judgment of risks, so whatever risk levels actually existed in society were acceptable. His major finding was that people will accept risks 1,000 greater if they are voluntary (e.g. driving a car) than if they are involuntary (e.g. a nuclear disaster).
This early approach assumed that individuals behave in a rational manner, weighing information before making a decision. Individuals have exaggerated fears due to inadequate or incorrect information. Implied in this assumption is that additional information can help people understand true risk and hence lessen their opinion of danger . While researchers in the engineering school did pioneer research in risk perception, by adapting theories from economics, it has little use in a practical setting. Numerous studies have rejected the belief that additional information, alone, will shift perceptions .
Psychology approach
The psychology approach began with research in trying to understand how people process information. These early works maintain that people use cognitive heuristics in sorting and simplifying information which lead to biases in comprehension. Later work built on this foundation and became the psychometric paradigm. This approach identifies numerous factors responsible for influencing individual perceptions of risk, including dread, newness, stigma, and other factors .Heuristics and biases
The earliest psychometric research was done by psychologists Daniel KahnemanDaniel Kahneman
Daniel Kahneman is an Israeli-American psychologist and Nobel laureate. He is notable for his work on the psychology of judgment and decision-making, behavioral economics and hedonic psychology....
and Amos Tversky
Amos Tversky
Amos Nathan Tversky, was a cognitive and mathematical psychologist, a pioneer of cognitive science, a longtime collaborator of Daniel Kahneman, and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his early work concerned the foundations of measurement...
, who performed a series of gambling experiments to see how people evaluated probabilities. Their major finding was that people use a number of heuristics to evaluate information. These heuristics are usually useful shortcuts for thinking, but they may lead to inaccurate judgments in some situations – in which case they become cognitive bias
Cognitive bias
A cognitive bias is a pattern of deviation in judgment that occurs in particular situations. Implicit in the concept of a "pattern of deviation" is a standard of comparison; this may be the judgment of people outside those particular situations, or may be a set of independently verifiable...
es.
- Representativeness: is usually employed when people are asked to judge the probability that an object or event belongs to a class / processes by its similarity:
- insensitivity to prior probability
- insensitivity to sample size
- misconception of chance (gambler fallacy)
- insensitivity to predictability
- illusion of validity
- misconception of regression
- Availability heuristicAvailability heuristicThe availability heuristic is a phenomenon in which people predict the frequency of an event, or a proportion within a population, based on how easily an example can be brought to mind....
: events that can be more easily brought to mind or imagined are judged to be more likely than events that could not easily be imagined:
- biases due to retrievability of instances
- biases due to the effectivenss of research set
- biases of imaginability
- illusiory correlation
- Anchoring and Adjustment heuristic: people will often start with one piece of known information and then adjust it to create an estimate of an unknown risk – but the adjustment will usually not be big enough:
- insufficient adjustment
- biases in the evaluation of conjunctive and disjunctive event
- anchoring in the assessment of subjective probability distributions
- Asymmetry between gains and losses: People are risk averse with respect to gains, preferring a sure thing over a gamble with a higher expected utility but which presents the possibility of getting nothing. On the other hand, people will be risk-seeking about losses, preferring to hope for the chance of losing nothing rather than taking a sure, but smaller, loss (e.g. insuranceInsuranceIn law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
). - Threshold effects: People prefer to move from uncertainty to certainty over making a similar gain in certainty that does not lead to full certainty. For example, most people would choose a vaccine that reduces the incidence of disease A from 10% to 0% over one that reduces the incidence of disease B from 20% to 10%.
Another key finding was that the experts are not necessarily any better at estimating probabilities than lay people. Experts were often overconfident in the exactness of their estimates, and put too much stock in small samples of data.
Cognitive Psychology
The majority of people in the general public express a greater concern for problems which appear to possess an immediate effect on everyday life such as hazardous waste or pesticide-use than for long-term problems that may affect future generations such as climate change or population growth . People greatly rely on the scientific community to assess the threat of environmental problems because they usually do not directly experience the effects of phenomena such as climate change. The exposure most people have to climate change has been impersonal; most people only have virtual experience though documentaries and news media in what may seem like a “remote” area of the world. However, coupled with the population’s wait-and-see attitude, people do not understand the importance of changing environmentally destructive behaviors even when experts provide detailed and clear risks caused by climate change.Psychometric paradigm
Research within the psychometric paradigm turned to focus on the roles of affect, emotion, and stigma in influencing risk perception. Melissa Finucane and Paul SlovicPaul Slovic
Paul Slovic is a professor of psychology at the University of Oregon and the president of the Decision Research group. He earned his Ph.D. in psychology at the University of Michigan in 1964....
have been among the key researchers here. These researchers first challenged Starr's article by examining expressed preference
Preference
-Definitions in different disciplines:The term “preferences” is used in a variety of related, but not identical, ways in the scientific literature. This makes it necessary to make explicit the sense in which the term is used in different social sciences....
– how much risk people say they are willing to accept. They found that, contrary to Starr's basic assumption, people generally saw most risks in society as being unacceptably high. They also found that the gap between voluntary and involuntary risks was not nearly as great as Starr claimed.
Slovic and team found that perceived risk is quantifiable and predictable. People tend to view current risk levels as unacceptably high for most activities. All things being equal, the greater people perceived a benefit, the greater the tolerance for a risk. If a person derived pleasure from using a product, people tended to judge its benefits as high and its risks as low. If the activity was disliked, the judgments were opposite. Research in psychometrics has proven that risk perception is highly dependent on intuition, experiential thinking, and emotions.
Psychometric research identified a broad domain of characteristics that may be condensed into three high order factors: 1) the degree to which a risk is understood, 2) the degree to which it evokes a feeling of dread, and 3) the number of people exposed to the risk. A dread risk elicits visceral feelings of terror, uncontrollable, catastrophe, inequality, and uncontrolled. An unknown risk is new and unknown to science. The more a person dreads an activity, the higher its perceived risk and the more that person wants the risk reduced .
Anthropology/sociology approach
The anthropology/sociology approach posits risk perceptions as produced by and supporting social institutions . In this view, perceptions are socially constructed by institutions, cultural values, and ways of life.Cultural theory
"The Cultural Theory of riskCultural Theory of risk
The Cultural Theory of risk, often referred to simply as Cultural Theory , consists of a conceptual framework and an associated body of empirical studies that seek to explain societal conflict over risk...
" (with capital C and T). Cultural Theory is based on the work of anthropologist Mary Douglas
Mary Douglas
Dame Mary Douglas, DBE, FBA was a British anthropologist, known for her writings on human culture and symbolism....
and political scientist Aaron Wildavsky
Aaron Wildavsky
Aaron Wildavsky was an American political scientist known for his pioneering work in public policy, government budgeting, and risk management....
first published in 1982.
In Cultural Theory, Douglas and Wildavsky outline four “ways of life” in a grid/group arrangement. Each way of life corresponds to a specific social structure and a particular outlook on risk. Grid categorizes the degree to which people are constrained and circumscribed in their social role. The tighter binding of social constraints limits individual negotiation. Group refers to the extent to which individuals are bounded by feelings of belonging or solidarity. The greater the bonds, the less individual choice are subject to personal control. Four ways of life include: Hierarchical, Individualist, Egalitarian, and Fatalist.
Risk perception researchers have not widely accepted Cultural theory. Even Douglas says that the theory is controversial; it poses a danger of moving out of the favored paradigm of individual rational choice of which many researchers are comfortable.
Social amplification of risk framework
The Social Amplification of Risk Framework (SARF), combines research in psychology, sociology, anthropology, and communications theory. SARF outlines how communications of risk events pass from the sender through intermediate stations to a receiver and in the process serve to amplify or attenuate perceptions of risk. All links in the communication chain, individuals, groups, media, etc., contain filters through which information is sorted and understood.The framework attempts to explain the process by which risks are amplified, receiving public attention, or attenuated, receiving less public attention. The framework may be used to compare responses from different groups in a single event, or analyze the same risk issue in multiple events. In a single risk event, some groups may amplify their perception of risks while other groups may attenuate, or decrease, their perceptions of risk.
The main thesis of SARF states that risk events interact with individual psychological, social and other cultural factors in ways that either increase or decrease public perceptions of risk. Behaviors of individuals and groups then generate secondary social or economic impacts while also increasing or decreasing the physical risk itself .
These ripple effects caused by the amplification of risk include enduring mental perceptions, impacts on business sales, and change in residential property values, changes in training and education, or social disorder. These secondary changes are perceived and reacted to by individuals and groups resulting in third-order impacts. As each higher-order impacts are reacted to, they may ripple to other parties and locations. Traditional risk analyses neglect these ripple effect impacts and thus greatly underestimate the adverse effects from certain risk events. Public distortion of risk signals provides a corrective mechanism by which society assesses a fuller determination of the risk and its impacts to such things not traditionally factored into a risk analysis.