RiskRisk

Kate, Maria, PatrickKate, Maria, Patrick

Environmental PoliticsEnvironmental Politics

January 14January 14thth 2004 2004

Dealing with Risk

Why the Public and the Experts Disagree on Environmental Issues

1996

Howard Margolis

• Social Theory, particularly the underpinnings of individual choice and judgment, which shape aggregate social outcomes.

• Professor in the Irving B. Harris Graduate School of Public Policy Studies at the University of Chicago

Expert/Public ConflictsExpert/Public Conflicts

Expert are Worried, Public is not.Expert are Worried, Public is not. Experts are not worried, but Public is.Experts are not worried, but Public is. Why?Why?

IntuitionIntuition

Experts & Public operate on Experts & Public operate on different thought patternsdifferent thought patterns

Responding to StimuliResponding to Stimuli

LabLab narrow/artificial context narrow/artificial context

of experiments & of experiments & expected fatalitiesexpected fatalities

DetachedDetachedNormalNormal Learned behavior Learned behavior

throughout lifetimethroughout lifetime ContextualContextualSocialSocial Cultural backdrop on Cultural backdrop on

how we perceive the how we perceive the worldworld

ContextualContextual

More on IntuitionMore on Intuition

All vulnerable to illusionAll vulnerable to illusion Contextual cues necessary for Contextual cues necessary for

comprehensioncomprehension Missing a variable that might be Missing a variable that might be

important or might not be focused on important or might not be focused on patternspatterns

Theories to explain ConflictTheories to explain Conflict

IdeologyIdeology TrustTrust Rival RationalitiesRival Rationalities

IdeologyIdeology

Entrepreneurial: rely on market Entrepreneurial: rely on market forces, minimal regulation forces, minimal regulation (efficiency, autonomy)(efficiency, autonomy)

Egalitarian: favor consensus, even Egalitarian: favor consensus, even distribution of resources (fairness)distribution of resources (fairness)

Hierarchical: elite acting for good of Hierarchical: elite acting for good of community community

EgalitarianEgalitarian

Most ComplexMost Complex Naturally believes Hierarchies PerverseNaturally believes Hierarchies Perverse Example: Nuclear Power controlled by Example: Nuclear Power controlled by

eliteelite Further Split along Left-wing/Right-Further Split along Left-wing/Right-

wing lineswing lines Divides expert judgmentDivides expert judgment Polarizes publicPolarizes public Why Public SplitsWhy Public Splits

TrustTrust

Distrust causes disbeliefDistrust causes disbelief Disbelief causes distrustDisbelief causes distrust Both are motivated by fear of higher Both are motivated by fear of higher

order manipulation or honest mistakeorder manipulation or honest mistake

Rival RationalitiesRival Rationalities

What the expert sees as risk is not What the expert sees as risk is not the same as what the public seesthe same as what the public sees

Rationalizes but doesn’t explainRationalizes but doesn’t explain There may not be any right or wrong There may not be any right or wrong

perceptionsperceptions Public is most concerned with Public is most concerned with

“dread”“dread”

Four Points to the Habits of MindFour Points to the Habits of Mind

Until an intuition is challenged it does Until an intuition is challenged it does not occur to us that it might be wrong.not occur to us that it might be wrong.

When it is challenged we are more When it is challenged we are more likely to get angry than willing to likely to get angry than willing to change our mind.change our mind.

Logic alone is rarely effective.Logic alone is rarely effective. You are not conscious of what prompts You are not conscious of what prompts

an intuition, until it no longer makes an intuition, until it no longer makes sense to you.sense to you.

Poker Chip Scenario

3 chips, blue/blue, red/red, & red/blue. Without looking take out

one chip and lay it on the table.

The Risk MatrixThe Risk Matrix

Risk is a major Risk is a major factor in cognitive factor in cognitive intuitionintuition

Risks are seen in Risks are seen in terms of terms of opportunityopportunity

Fungibility: Fungibility: balancing Risk and balancing Risk and Opportunity to Opportunity to one’s advantage one’s advantage

OpportunitOpportunityy

No No OpportunitOpportunityy

DangeDangerr

FungibilityFungibility Better safe Better safe than Sorrythan Sorry

No No DangeDangerr

Waste not Waste not Want NotWant Not

IndifferencIndifferencee

Relationship between Probabilites Relationship between Probabilites

0

1

ObjectiveProbability

ExpectedResponse

ObservedResponse

Subjective vs. Subjective vs. Objective Objective ProbabilityProbability

Threshold effect Threshold effect (example: car (example: car insurance)insurance)

What affects a person’s attention What affects a person’s attention toward involved risks?toward involved risks?

Individual ExperiencesIndividual Experiences Concerns Prompted by OthersConcerns Prompted by Others Framing of the SituationFraming of the Situation Independent or PolarizedIndependent or Polarized

Characteristics affecting IntutionCharacteristics affecting Intution

BenefitsBenefits AccidentsAccidents VoluntarityVoluntarity FamiliarityFamiliarity ControllabilityControllability UnderstandingUnderstanding

Sources of IntuitionSources of Intuition

Direct ExperienceDirect Experience Social ExperienceSocial Experience Unfamiliar Experience (logically weak Unfamiliar Experience (logically weak

while cognitively strong)while cognitively strong)

Examples

• Closing of New York Schools

• Contaminates

Colorado and Idaho

Washington

• Genetic Engineering compared to Nuclear Waste

Criteria which Constitute RiskCriteria which Constitute Risk

Expert opinionExpert opinion FactsFacts TestingTesting Empirical DataEmpirical Data Statistical Statistical

Frequency of Frequency of EventsEvents

Public OpinionPublic Opinion IntuitionIntuition FearFear VoluntarityVoluntarity

Overly Cautious and Pessimistic Overly Cautious and Pessimistic PoliciesPolicies

Inaccuracy of Extrapolating effects of Inaccuracy of Extrapolating effects of low doses over long time from high low doses over long time from high dosesdoses

Ignoring Possible benefit from low Ignoring Possible benefit from low dosesdoses

Any risk (however small) outweighs Any risk (however small) outweighs any cost (however large)any cost (however large)

People are upset when People are upset when human lives are given dollar human lives are given dollar

valuesvalues

Every day people decide Every day people decide between life and moneybetween life and money

Example: Pollution cleanupExample: Pollution cleanup

There seem to be There seem to be unlimited resourcesunlimited resources

It seems proper to It seems proper to clean up as much as clean up as much as possiblepossible

There is a finite There is a finite amount of resources amount of resources (money comes from (money comes from ALL taxpayers)ALL taxpayers)

Most of the toxins Most of the toxins can be eliminated can be eliminated cheaplycheaply

All of the toxins All of the toxins can only be can only be eliminated with a eliminated with a LOT of effortLOT of effort

The Government Squanders the The Government Squanders the taxpayers moneytaxpayers money

Cost efficiency seems callousCost efficiency seems callous More cleanup means less risk & more More cleanup means less risk & more

jobsjobs Strong support for stringent standard Strong support for stringent standard

that ultimately failthat ultimately fail No individual is present to represent No individual is present to represent

ALL taxpayersALL taxpayers

We did not enjoy this We did not enjoy this book.book.

““This book drove me to foul This book drove me to foul language.” –Patricklanguage.” –Patrick