Dispute and morality in the perception of societal risks: extending the psychometric model

The psychometric paradigm has identified two classic dimensions, dread and unknown risk, structuring the perception of risks. We propose that disputed risk and morality are two additional dimensions that are relevant to describe the cognitive representation of societal risks. Disputed risk captures two aspects of a societal risk: first, that consensus about scientific evidence is low, and second, that the public debate about the risk issue is highly controversial. Morality refers to judgments of reprehensibility, capturing the fact that societal risks frequently involve violations of moral principles. In a survey study employing two samples, a household sample (N = 418) and a student sample (N = 88), participants evaluated 24 societal risks on 23 psychometric scales intended to assess the four constructs dread, unknown risk, disputed risk, and morality. Principal component analyses yielded three dimensions: a common dimension of dread and morality, a disputed risk dimension, and unknown risk. We also assessed judgments of overall riskiness for all risks. Morality and dread both proved to be strong and distinctive predictors of perceived overall riskiness in regression analyses; disputed risk and unknown risk, in contrast, do not play a substantial role as predictors. These findings were replicated across both samples. We conclude that disputed risk constitutes a novel and unique psychometric dimension; morality, on the other hand, coincides with dread in the cognitive representation of societal risks, while still showing a distinct and strong effect in the prediction of risk judgments.     

Determinants of risk behaviour: effects of perceived risks and risk attitude on farmer’s adoption of risk management strategies

The importance of risk perception and risk attitude for understanding individual’s risk behaviour are independently well described in literature, but rarely combined in an integrated approach. In this study, we propose a model assuming the choice to implement certain risk management strategies to be directly driven by both perceptions of risks and risk attitude. Other determinants influence the intention to apply different risk strategies mainly indirectly, mediated by risk perception and risk attitude. This conceptual model is empirically tested, using structural equation modelling, for understanding the intention of farmers to implement different common risk management strategies at their farms. Data are gathered in a survey completed by 500 farmers from the Flanders region in Belgium, investigating attitudes towards farming, perceived past exposure to risk, socio-demographic characteristics, farm size, perceptions of the major sources of farm business risk, risk attitudes and the intention to apply common risk management strategies. Our major findings are: (i) perception of major farm business risks have no significant impact on the intention of applying any of the risk strategies under study, (ii) risk attitude does have a significant impact. Therefore, rather than objective risk faced and the subjective interpretation thereof, it is the general risk attitude that influence intended risk strategies to be implemented. A distinction can be made between farmers willing to take risk, who are more inclined to apply ex-ante risk management strategies and risk averse farmers who are less inclined to implement ex-ante risk management strategies but rather cope with the consequences and diminish their effects ex-post when risks have occurred.     

Living in a foreign country: the meaning of place of origin and gender for risk perceptions,experiences, and behaviors

Abstract

Previous research has convincingly proven that perceptions, experience, and exposure to risks vary among certain groups in society. By drawing from a unique combination of Swedish survey data and interviews, this study aims to investigate perceptions and experiences of risks as well as in relation to behavior by analyzing the cleavages related to interactions between place of origin and gender. Theoretically, we see individual risk perception as part of situated hierarchical power relations where an individual’s position (which is an intersection of, for example, gender, race, age, and place of origin) structures action and thought. Findings verify that foreign-born men and women perceive risks to a greater extent than those born in Sweden. However, no direct pattern of ethnicity is apparent in exposure to risks, but since predictors measuring experience of discrimination are shown to be significant, the effect can be mediated by such circumstances. In terms of how risks have affected behavior, women, irrespective of their ethnicity, are affected. Exposure to tragic experiences among those who are foreign born can pose risks that are perceived to a greater extent. Furthermore, more vulnerable material conditions can also affect how risks are perceived, and uncertainty due to a lack of resources and as an inherent ingredient of living in a foreign country seem to enhance perceptions of risk and feelings of unsafety. Last, the sense of discrimination appears to influence exposure to certain risks, which might capture an interaction between racism and violence.     

Emotions,attitudes, and appraisal in the management of climate-related risks by fish farmers in Northern Thailand

Many previous studies have documented that farmers are risk-averse, while other studies have shown that farmers analyze and estimate risks. Conventional risk aversion measures and analytical judgment often do not fully explain decision behavior. Thus, it may be necessary to consider emotions. The objective of this study was to enhance understanding of the interactions between attitudes, analysis, and emotions in making risk decisions. The study used a mixture of methods, including: a tablet game, risk aversion scales, in-depth interviews, and focus group discussions with fish cage farmers in Northern Thailand. There was no significant difference in risk aversion with respect to gender, age group, or region. Having sufficient capital made it possible to take more risks. Recently being impacted by floods or droughts, or being very concerned with climate change, was not associated with taking fewer risks. Measures of risk aversion did not predict risk decisions. Feeling worried, concerned, anxious, or stressed were the most common negative emotions referred to in interviews. Fear was a reason for not taking risks. Common positive emotions were joy, excitement, and feeling relaxed or relieved. Men who expressed feeling excited or thrilled chose riskier, higher stocking densities in games than women. A common belief was that men were quicker and more confident when making decisions. Another was that emotions had little impact on decisions, but were a response to success and failure – a claim inconsistent with other findings that imply emotions are also important prior to stocking decisions, and while waiting for the harvest. Fear and anxiety in the period prior to harvest may help motivate risk management practices, such as close monitoring and aeration. In conclusion, emotions may play a more important role in making decisions about climate-related risks than was previously recognized.     

Risk propensity within the military: a study of Swedish officers and soldiers

Issues concerning risks in the military have gained increased attention within the Swedish Armed Forces, particularly relating to the new focus on an all voluntary force participating in international missions. Military activities inevitably include an element of calculated risk-taking, while at the same time the unnecessary taking of risks must be minimized. Within the context of the specific mission and situation, a number of factors relating to demographic variables, traits and beliefs may influence individual inclinations towards risk behaviour. The purpose of this study was to examine the relationship between such factors and individual risk propensity. Data were collected from two samples of Swedish soldiers and officers. Examining demographic variables, negative safety values and risk propensity were found to decrease with age, while men demonstrated a more sceptical view of safety measures and a higher risk propensity than women. The trait known as lack of deliberation, reflecting an inability to think ahead and foresee consequences, was positively related to risk propensity. A more sceptical view of safety was shown to be associated with a higher sense of personal invincibility and together with lack of deliberation predicted variations in danger-seeking scores. The distinction between functional and non-functional risk-taking is discussed on the basis of the relationships found in the study. Implications for recruitment to the military as well as for training and leadership are suggested, emphasizing the need for military leaders to balance their leadership in terms of safety-oriented and risk-promoting behaviours.     

A multi-attribute approach to assess homeland security risk

The United States Department of Homeland Security manages a wide spectrum of risks involving crime, terrorism, accidents, and natural disasters. This paper supports disaster management by identifying which attributes should be used to describe risks comprehensively and assessing the need to incorporate such multiattribute information into risk management processes. Attributes for describing homeland security risks were selected through a literature review. These attributes were then used in a risk assessment of homeland security hazards that informed risk ranking sessions conducted with members of the general public. The results taken together support the use of a range of attributes and perspectives. While aspects of life/health and economic damage were considered most important by both experts and the lay public, other attributes were of widespread importance, including attributes related to dread and uncertainty. These results demonstrate how to present risks in a deliberative risk management process and the importance of doing so using a complete set of attributes to describe the risks.     

Locally Greater Vulnerability to Background Risk

Willingness to take on risk is influenced by the presence of fair and unfair background risks for decision makers who are risk vulnerable as defined by Gollier and Pratt [1996], for these decision makers are more risk averse when they possess such an uninsurable background risk. We present an alternative derivation of the index of local vulnerability based on Diamond and Stiglitz [1974] compensated increases in risk, such that risk aversion increases with the introduction of any small fair background risk if and only if the index of local vulnerability is positive. We establish that the increase in risk aversion is greater for those who are more vulnerable as measured by the index of local vulnerability.     

Financial advice and gender: Wealthy individual investors in the UK

We examine how gender differences in investment risk tolerance, knowledge, confidence and portfolio cash allocations relate to the gender mix of investors and financial advisors among a sample of wealthy individuals in the UK. Our results demonstrate that gender effects are more nuanced than previously assumed. First, while even wealthy women consider themselves more conservative and allocate a higher proportion of their investable assets to cash than men, previous findings of lower investment knowledge and confidence do not extend to our sample. Second, having an advisor matters. Advised investors perceive themselves to have a higher risk tolerance and invest 10.6%-points more than self-directed investors. Finally, the investor-advisor gender combination matters, but only for female investors. Women with male advisors are more risk averse, feel less knowledgeable and less confident about their investment decisions. They also invest 11%-points less than women with female advisors. Indeed, female investors advised by women report the highest risk tolerance and make the lowest portfolio allocation to risk-free assets across the full sample, including men.     

Drivers of flood and climate change risk perceptions and intention to adapt: an explorative survey in coastal and delta Vietnam

Abstract

This article contributes to current research about determinants of climate change and flood risk perception, and intentions to take adaptive measures. We propose a research model that distinguishes between vulnerability and severity components of perceived risks, and adds perceived adaptive capacity as a third factor to predict the intention to take adaptive measures. We used this combined model as a conceptual lens for an explorative survey among 1086 residents of coastal and delta communities in Vietnam. Pairwise analyses revealed a significant association of flood and climate change risk perceptions with individual’s flood experience, climate change knowledge, frequency of community participation and socio-demographic factors. However, in multivariate analysis, the influence of most socio-demographic factors became weak or patchy. Flood experience was the most influential driver of flood-related risk perceptions but weak for climate change-related risk perceptions and behavioural intentions. Knowledge strongly increased the intention to adapt to flood and climate risks and the perceived vulnerability to and severity of climate change risks, but reduced the perceived capacity to adapt to climate risks. Frequency of community participation increased the perceived vulnerability and severity of climate change risks, the intention to adapt to both climate and flood risks and the perceived capacity to adapt to flood risks, but reduced the perceived capacity to adapt to climate risks. Our research confirms earlier findings that individuals’ knowledge, place-specific experience and social-cultural influences are key predictors of both flood and climate change risk perceptions and intentions to take adaptive measures. These factors should therefore receive ample attention in climate risk communication.     

Evaluating lotteries,risks, and risk‐mitigation programs

Two experiments were designed to explore the existence of systematic differences in risk perceptions and risk attitudes between Chinese and US participants. The first experiment involved ranking monetary lotteries using measures of perceived riskiness and willingness to pay (WTP). Several simple heuristics were evaluated to predict perceived riskiness and WTP. Using WTP responses, Cumulative Prospect Theory functions were determined for participants from both countries. The second experiment involved ranking multi‐attribute real‐world risks and associated risk‐mitigation programs using measures of concern and preference, respectively. Compared to their US counterparts, Chinese participants are found to be less risk averse, more concerned about risks with higher catastrophic potential, and more in favor of risk‐mitigation programs with greater scope of benefit. The results also reveal higher within‐group agreement by Chinese participants for all tasks. For both national groups, the within‐group agreement was highest when ranking risk‐mitigation programs, but lowest when ranking lotteries with negative expected value. The implications of cross‐cultural versus cross‐task variation are discussed.     

Variance Vulnerability, Background Risks, and Mean-Variance Preferences

An agent with two-parameter, mean-variance preferences is called variance vulnerable if an increase in the variance of an exogenous, independent background risk induces the agent to choose a lower level of risky activities. Variance vulnerability resembles the notion of risk vulnerability in the expected utility (EU) framework. First, we characterize variance vulnerability in terms of two-parameter utility functions. Second, we identify the multivariate normal as the only distribution such that EU- and two-parameter approach are compatible when independent background risks prevail. Third, presupposing normality, we show that—analogously to risk vulnerability—temperance is a necessary, and standardness and convex risk aversion are sufficient conditions for variance vulnerability.     

The differences in perception of radiological risks: lay people versus new and experienced employees in the nuclear sector

This paper studies the differences in perception of two radiological risks – an accident at a nuclear installation and medical X-rays – between four different groups: the general population without (1) and with experience related to radiological risks (2), new employees (3) and professionally exposed people (4) in the nuclear sector. More precisely, this study determines if differences in risk perception can be explained by the level of experiences with ionizing radiation, the knowledge level about radiological risks, the confidence in authorities, the attitude towards nuclear energy, the trust in a management of nuclear installations, gender and age. The data are gathered using computer assisted personal interviews based on the SCK-CEN Barometer of the Belgian Nuclear Research Centre. The relations between risk perception and the independent variables are tested with linear regression analysis. The risk perception of both risks differs significantly between the four population groups. The professionally exposed people and the new employees in the nuclear sector have a significant higher risk perception for medical X-rays compared to the risk for an accident at a nuclear installation. For the general population without experience, it was just the opposite. The general population with experience does not have a significant difference in risk perception between the two radiological risks. Level of experiences with ionizing radiation is determined as an important variable; people have a lower perception of radiological risks when they have higher experiences with risk.     

Delayed Expected Loss Recognition and the Risk Profile of Banks

This paper investigates the extent to which delayed expected loan loss recognition (DELR) is associated with greater vulnerability of banks to three distinct dimensions of risk: (1) stock market liquidity risk, (2) downside tail risk of individual banks, and (3) codependence of downside tail risk among banks. We hypothesize that DELR increases vulnerability to downside risk by creating expected loss overhangs that threaten future capital adequacy and by degrading bank transparency, which increases financing frictions and opportunities for risk‐shifting. We find that DELR is associated with higher correlations between bank‐level illiquidity and both aggregate banking sector illiquidity and market returns (i.e., higher liquidity risks) during recessions, suggesting that high DELR banks as a group may simultaneously face elevated financing frictions and enhanced opportunities for risk‐shifting behavior in crisis periods. With respect to downside risk, we find that during recessions DELR is associated with significantly higher risk of individual banks suffering severe drops in their equity values, where this association is magnified for banks with low capital levels. Consistent with increased systemic risk, we find that DELR is associated with significantly higher codependence between downside risk of individual banks and downside risk of the banking sector. We theorize that downside risk vulnerability at the individual bank level can translate into systemic risk by virtue of DELR creating a common source of risk vulnerability across high DELR banks simultaneously, which leads to risk codependence among banks and systemic effects from banks acting as part of a herd.     

商业银行信贷的国别风险与管理策略

信贷国别风险已上升为国际社会最为关注的风险之一。与商业银行一般信贷风险相比,国别风险在风险的界定、风险的源头、风险的种类、风险的补偿、风险的群体、风险的关联、风险的分类以及风险的计量方面都有明显的不同。目前对国别风险认识尚处于初级阶段,只是定性的指引而并没有定量分析,鉴别和衡量技术标准不一,风险计提实际操作难度大。因此,对于国别风险事件中信贷资本回收等造成的影响和损失商业银行应进行量化评估,建立与国别风险暴露规模相适应的监测机制,对不同类型、不同概率和规模的国别事件引发的风险分类处理。     

Exemplification effects: responses to perceptions of risk

Exemplification theory asserts that message components that are iconic and emotionally arousing are easily accessed, and are therefore relied upon when making subsequent behavioral decisions. A reanalysis of data from three studies collected at different times, unrelated experimental stimuli (terrorism, food ingredients, and bed bugs), different media (visual and print), varying geographic locations, different experimental conditions (laboratory and online), and diverse participants suggests that these processes work differently for men and women. Results suggest that the medium through which an exemplar is presented and/or experienced may be fairly inconsequential, but there are underlying processes which may determine the extent to which individuals will modify behavioral intentions related to risks. After witnessing exemplified portrayals, women were more likely than men to express a desire to modify behavior, perceive themselves as more susceptible to the risk, and perceive the risk as being more severe across the studies. The findings are discussed in terms of directions for future research and implications for risk communication practitioners.     

Pseudo resilient supply chains: concept,traits, and practices

Supply chain vulnerability (SCV) and its counterpart supply risk management are increasingly researched in recent years. SCV is often quantifiable and can be effectively monitored if practices are implemented on a systematic basis. It is essentially more important to extend the research in supply chain risk management so as to address certain traits where the companies perform poor or areas where they overlook their performances. Here, we introduce the concept and property, the so-called pseudo resilience in supply chains where supply chains pretend to perform better in its risk management capabilities, but are essentially vulnerable. Pseudo resilience is an incessant nature of many supply chains to overlook concomitant risks. Typical traits of pseudo resilience were identified in this research and a brief analysis of the disruptions and its effects was done. This research is a maiden effort in the direction of addressing the property of pseudo resilience in supply chains. It is imperative for managers to identify the traits of pseudo resilience in their supply chains so as to avoid the ill effects resulting from it. Further quantitative and qualitative researches are recommended for evincing the property of pseudo resilience in supply chains.     

Influence of perceived risk on entrepreneurial desirability and feasibility: multidimensional approach for nascent entrepreneurs

This study examines the influence of perceived risk on entrepreneurial desirability and feasibility as determining factors in the intention to start a self-owned business. Specifically, a multidimensional approach is taken to examine the different types of risks associated with entrepreneurship: economic, social, time, health and personal risks. The results obtained from a sample of 376 new entrepreneurs in Mexico confirm the fact that the perceived desirability and feasibility have a significant and positive effect on the intentions to start their own company. On one hand, the empirical evidence obtained shows a heterogenic effect of the risk dimensions associated with entrepreneurship on the perceived desirability and feasibility in their behaviour. Therefore, it was found that the economic risk associated with entrepreneurship has a negative effect on the feasibility to start a business, but does not significantly influence the desirability of that behaviour. On the other hand, a significant effect from the risk related to health is not seen on desirability and feasibility, but the negative influence of personal risk is empirically supported for both variables. Finally, the results obtained related to social and time risk are contradictory. Social risk negatively influences entrepreneurship desirability, but a positive effect is observed on the feasibility to create a business. For its part, the empirical evidence obtained does not support any effect of the time risk on the perceived feasibility of starting a business, but there is a positive on entrepreneurship desirability. These results, which are contrary to the traditional concept of risk as a barrier to entrepreneurship, are justified by the vocational nature of this behaviour and by the social sacrifices that are sometimes necessary to be able to make a business work.     

Associations between risk judgments and demand for transport risk mitigation

The present study tested a hypothesized model regarding associations between risk sensitivity, risk perception, transport priorities, worry, and demand for risk mitigation in transport. An additional aim was to investigate differences in risk perception, worry, risk sensitivity, transport priorities, and demand for risk mitigation in age-groups, gender, and educational levels. A mail survey was conducted in a representative sample of the Norwegian public over 18?years (n?=?1947) in 2008. The response rate was 31%. The results showed that transport priorities were the strongest predictor of demand for risk mitigation. Risk perception seems to be mediated by worry. Risk sensitivity was directly associated with transport risk perception and, not as predicted, also directly with demand for risk mitigation. The two youngest age-groups (18–30 and 31–50?years) perceived the probabilities of transport accidents in private transportation as significantly larger and also judged other nontransport risks to be larger than those over 50?years of age. The youngest age-group was more worried about injuries from private transportation, but reported lower demands for risk mitigation. The findings merit further research into the relationship between risk perception and demand for risk mitigation. The results indicated that younger individuals were more worried about injuries and assessed the probability of accidents to be larger, while they report a lower demand for risk mitigation compared to older age-groups.     

Italian consumers’ attitudes towards food risks: self-protective and non-self-protective profiles for effective risk communication

The study aims to assess Italian consumers’ attitudes towards food risks and seeks to outline their socio-demographic and behavioural characteristics on the basis of their attitudes (self-protective and non-self-protective) towards food risks. Using the Computer-assisted telephone interviewing survey method, a sample of 1000 Italian consumers was interviewed on risk perception issues and general eating habits. Factor analyses on the consumers’ propensities to read the label when buying a food product for the first time, their propensities to seek food-related information and their perceived levels of exposure to food risks have enabled us to define Italian consumers’ attitudes towards food risks. Distinguishing between consumers with more self-protective attitudes and those with less self-protective attitudes and identifying their distinctive socio-demographic and behavioural characteristics (e.g. gender, age, the frequency with which respondents do grocery shopping and the channels used for further inquiry) are crucial for communication campaigns aimed at reducing consumers’ exposure to food risks.