Risk Perception and Behavioral Economics

Principal Investigator: William Burns


In a previous CREATE report (Burns, 2007), Burns provides a brief summary of pivotal studies in the risk perception literature, recommendations from a risk perception workshop sponsored by CREATE, and findings from several national public response surveys following the events of September 11th.  These studies and workshop recommendations indicate that there is a need to provide policy makers and risk managers with input to make behaviorally sound decisions with the idea of not only responding to crises but developing disaster resilient communities (Fischhoff, 2006, Lasker, 2004). Numerous studies point to the central role perceptions of risk play in people’s level of concern and likely behavior during and following a disaster. The indirect impact emerging from these perceptions and behaviors may well dwarf the direct costs resulting from loss of life and property. This possibility has led many researchers to suggest that as a long term strategy we need to investigate and place more emphasis on loss mitigation both from natural disasters as well as terrorist acts.   But effective mitigation requires sustained support for such policies over a long period of time. How much do we really know about the conditions that contribute to or erode pubic support? Preferences for policy in the short term appear to be influenced by the type of emotion the situation evokes (e.g. anger versus fear) and to some extent the credibility of information sources during an emergency. Both are themselves impacted by media portrayal. However, sustained policy support may be tied to belief structure, trust in public officials, and perhaps active participation in community disaster planning. These latter three factors also seem to vary across cultural subgroups. Type of event (natural disaster, anthrax release, suicide bombing) may also determine the nature of public response and the policies people are willing to support to ensure their safety (Burns and Slovic, 2007). Consider Figure 1 which compares perceptions of risk for an anthrax release, bomb blast, infectious disease and propane tank explosion. Terrorist events are of greatest concern and infectious diseases have a higher perceived risk than explosions. Characteristics of an event should figure into mitigation planning.  It seems reasonable to suspect that the dynamics of community response (e.g. mitigation efforts prior to and after an attack) may be a product of and contribute to sustained support for disaster policy.