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.     

The meta‐governance of risk and new technologies: GM crops and mobile telephones

The stylistic shift from government to governance in the regulation of risks associated with new technologies is often portrayed as an attempt to reach a deeper consensus over public controversies and to avoid future risk management failures. Stakeholder involvement in decision‐making through more inclusive and learning styles is seen as increasingly necessary in order to correct the steering deficit of the state, to rebuild trust in state institutions, and to obviate problems caused by uncertainty and different value perspectives in risk assessments. In this paper we scrutinise this model of risk and governance in the light of recent developments in the UK, focusing in particular on the regulation of genetically modified crops and mobile telecommunications technology. We conclude that the shift to governance is best understood in terms of the accommodative response of the state to a number of new challenges: primarily posed by the changing role of the private sector; by pressures on government to engender public trust in the face of shifting social values; and by the related difficulty in taking decisions with confidence and legitimacy. There is a perceived need within government for a more deliberative approach to regulation and standard‐setting, achieved by a creative combination of managed scientific order and the establishment of deliberative cooperative institutions. However the creation of deliberative mechanisms and institutions is not an easy passage, especially if it is accelerated by uncontrollable political events. Indeed, we caution against romantic interpretations of governance as indicating a uniform popular trend towards the democratisation of state decision‐making, despite the very real opportunities for reform that it affords. Rather, we suggest that a more plausible account is provided by seeing governance as a form of adaptive management necessitated by a series of interlocking economic and social changes, and responses to successive risk management crises.     

Scientist and public responses to BSE‐related risk: A comparative study

Social studies of risk repeatedly have found substantial divergences in the way that experts/scientists and members of the general public appraise risks associated with health and environmental hazards. However, empirical evidence for these differences remains controversial. A recent review of literature suggests in particular that divergences between experts and lay people may potentially result from confounding socio‐demographic factors. The purpose of the present article is to investigate and to compare how medical scientists and members of the general population reacted to BSE (“mad cow disease”) in France. A sample of 401 scientists belonging to the French Institute of Health and Medical Research (INSERM) and a representative sample of 902 French citizens were asked about their cognitive, affective and behavioural responses to BSE. Results show that non‐scientists tended to express much more concern about BSE‐related risk than scientists, even when socio‐demographic variables were controlled. However, (1) no significant differences were found between these two groups concerning subjective epidemiological predictions, and (2) scientists manifested greater avoidance of beef or beef by‐products avoidance following the BSE epidemic than lay respondents did. The implications of these paradoxical results are discussed.     

Comparative optimism and risky road traffic behaviors among high‐risk sports practitioners

This study examines the relationship between participation in risky sports, comparative optimism (CO), and risky road traffic behaviors among a sample of adult men. We surveyed high‐risk (n = 313) and low‐risk (n = 53) sports practitioners, and non‐sportsmen (n = 89), assessing their CO, as well as their self‐reported risky behaviors and their accident experiences while driving a car. Results show that high‐risk sports practitioners expressed CO regarding the quality of their reflexes while driving and their vulnerability to traffic accidents. High‐risk sportsmen reported more risky behaviors while driving a car than the members of the other groups, and some of them, namely BASE‐jumpers, have experienced more traffic accidents. High‐risk sportsmen’s risky behaviors and accident experiences did not prevent them from expressing CO regarding their vulnerability to road accidents. Results are discussed, as well as putative psychological mechanisms underlying high‐risk sport practitioners’ CO and risky behaviors while driving.     

Framing risks in a safety‐critical and hazardous job: risk‐taking as responsibility in railway maintenance

In risk management research, risk‐taking is mostly treated as deviation that calls for improved risk communication. I argue, however, that risk‐taking should be seen as expressing a rationale of its own; thus, improving safety requires that this rationale be adequately understood and that the conditions that reproduce risk‐taking be changed. This argument is supported by an ethnography of railway maintenance in Sweden. Railway technicians are charged with maintaining the railway infrastructure to support safe and punctual trains, an assignment that exposes them to occupational hazards. The technicians' claim of occupational responsibility for transportation safety risks is framed by two notions in occupational discourse: first, the safety‐critical nature of their tasks, and second, the notion of service to the general public. Technician interdependence in achieving occupational safety requires mutual responsibility in the team. Technicians justify occupational risk‐taking, claiming it is sometimes needed to achieve production goals given the available time and resources and the manageability of the risks taken. Finally, I stress the need for technicians to change their frames of reference and for employers to assume responsibility for reducing the need for risk‐taking.     

Biosecurity risk and peri‐urban landholders – using a stakeholder consultative approach to build a risk communication strategy

This article presents a straightforward and highly participatory methodology for addressing government agencies’ concerns with effective communication strategies for biosecurity when stakeholders are diverse and there is uncertainty about their levels of knowledge. The case study was among peri‐urban landholders in an area where serious animal disease infestation has occurred within the last 10 years. Initially we engaged stakeholders in a consultative process that included establishing a stakeholder influence and interest map for both weeds and animal diseases. This was followed with a mental model approach involving surveys and in‐depth interviews. We elicited information about landholders’ knowledge, practices, values and beliefs regarding biosecurity risk. Our consultative process generated examples that indicate that effective risk communication relies on establishing and affirming mutual levels of trust and credibility between landholders and agencies. While this finding is not surprising, we argue that attention to stakeholder consultative processes is central to overcoming barriers to changing practices and building awareness. Secondly, our data confirmed that while smaller landholders were the initial target for the communication, all landholders represented a similar level of biosecurity risk. Therefore, our approach was critical in overcoming external assumptions about particular actors. Finally, our data pointed to the need to develop a whole of landscape approach to biosecurity risk communication strategy in consultation with local stakeholders.     

Risk as feelings or risk and feelings? A cross‐lagged panel analysis

This article focuses on affective and cognitive processes underlying the perception of risk. A limitation with most process models of affect/cognition is that they include only concurrent emotions. By following a group (n?=?129) of military sailors prospectively during an international operation, we explored longitudinal relations between perceived risk and related feelings.

Longitudinal cross‐lagged path models were estimated to explore the relationships between perceived risk, worry, and emotional distress. Results gave support to earlier studies by showing that cross‐sectional measures of risk and worry were weakly related. Across time, worry and emotional distress were reciprocally related. Perceived risk had impact on worry but not on emotional distress. Neither worry nor emotional distress influenced perceived risk.

The risk‐as‐feelings hypothesis postulates a direct effect of feelings onto behavioural choice, and a reciprocal relation between cognitive evaluations and feelings.

Our findings do not support a reciprocal relation between judgements of risk and feelings, but an impact from risk on to worry. Between various measures of feelings reciprocity seems to exist. Further replications, including also behavioural measures, are needed.     

The role of perceived costs and perceived benefits in the relationship between personality and risk‐related choices

This paper considers how perceptions of costs and benefits can influence the association between personality and risky choice behaviour. We assessed perceptions and behaviours in six domains (ethical; investment; gambling; health and safety; recreational; social) using the DOSPERT and measured personality using the NEO PI‐R. Results from structural equation modelling showed that personality had a direct effect on risky choice behaviour in four domains (social, ethical, gambling and recreational risk‐taking). In addition, perceived costs and benefits mediated the relations between personality and risk‐taking in the five domains (social, ethical, gambling, recreational and investment risk‐taking). Evidence for a mechanism that integrates both direct and indirect effects of personality on behaviour is discussed.     

Textual risk disclosures and investors’ risk perceptions

We examine the association between changes in companies’ textual risk disclosures in 10-K filings and changes in stock market and analyst activity around the filings. We find that annual increases in risk disclosures are associated with increased stock return volatility and trading volume around and after the filings. Increases in risk disclosures are also associated with more dispersed forecast revisions around the filings. In contrast to prior literature documenting resolved uncertainties in response to various types of company disclosures, our findings suggest that textual risk disclosures increase investors’ risk perceptions. However, the results are less pronounced for firm-level disclosures that deviate from those of other companies in the same industry and year. These results lend support for critics’ arguments that firm-level risk disclosures are more likely to be boilerplate.     

Individual differences in a switch from risk‐averse preferences for gains to risk‐seeking preferences for losses: can personality variables predict the risk preferences?

Individual differences on a framing problem and a reflection problem were examined in light of the Myers–Briggs Type Indicator. The predictions on information processing style, derived from Jungian personality type theory, were tested for the much‐discussed framing effect in the Asian Disease Problem and for the reflection effect on which the framing effect presumably depends. As anticipated, the results revealed that business students with higher iNtuition/Extraversion scores and lower Judging score were more likely to be consistently risk‐seeking. Conversely, those with higher Sensing/Judging scores were more likely to be consistently risk‐averse. Both framing and reflection effects were displayed by those with higher Sensing/Judging scores. However, the second expected result was not supported. Rather, a so‐called ‘gray hair/clouds’ effect (effect name inspired by Medin and Shoben's research in 1988), questioning the validity of risk propensity, was observed and analyzed. The somewhat surprising results and their theoretical and practical implications are discussed.     

Perceptions of farmers on health risks and risk reduction measures in wastewater‐irrigated urban vegetable farming in Ghana

This paper draws upon the social science literature to evaluate whether materialist/post‐materialist, environmental, and scientific/technological worldviews predict levels of support for biotechnology applications. The novelty of this research is two‐fold: 1) it incorporates the post‐materialist hypothesis in risk perception models, and 2) it evaluates the effects of the these three worldviews simultaneously. Data from a regional southwest telephone survey in the United States conducted in Spring 2004 were used to investigate whether these three worldviews were related to support of various animal and plant biotechnology applications. The results illustrated that post‐materialist values were not significantly related to support for animal or plant biotechnology applications. However, environmental and science and technology measures were related to support. One of the new ecological paradigm items, “humans have the right to modify nature,” was consistently related to support for animal and plant biotechnology applications, and anti‐anthropocentric values were related to support for two plant applications. General attitudes toward science and technology were related to support for both animal and plant biotechnology applications. The results provide evidence that perceptions of these applications are multi‐dimensional and that respondents conceptualize animal and plant biotechnology applications differently.     

High‐risk Technology,Legitimacy and Science: The U.S. Search for Energy Policy Consensus

Since the 1980s, a growing body of social scientific research has focused on the organizational character of the institutions that are responsible for the management and functioning of high‐risk technological systems. While there are differences among the social theories of risks that have developed on both sides of the Atlantic, much of the work offers warnings that are relevant to public policy. The warnings have largely been ignored in recent U.S. policy decisions, as illustrated most clearly by the U.S. Energy Act of 2005, which largely overlooks important questions regarding the environmental and technological risks of the technologies favored by the Act. Sociological work suggests that the scientific systems that have been instrumental in the legitimization process of high‐risk technological options of energy, more broadly, should be examined in connection with the societal institutions having responsibility for transparency, safety, and environmental protection.     

Dealing with risk–risk interdependencies and trade-offs in relation to development and use of new technologies

The paper deals with the recognized need to systematically explore trade-offs in modern among single risks in modern risk management systems. These risk trade-offs have often been downplayed as ‘side effects’ or ‘unintended consequences’ and, even more often, poorly examined, quantified, and managed. The paper proposes how to deal with the real or possible trade-offs and within a framework which covers also the emerging risks: from early notion and indications up to fully developed and recognized (mature) risks. The trade-offs have been quantified primarily by means of indicators key/safety performance indicators. The framework relies very much on the ideas proposed by IRGC, ISO 31000, Solvency directive and other recognized concepts and takes practical examples from the running EU project iNTeg-Risk.     

The “Rent-To-Own” mortgage and prepayment risk

The most important risk factor in the mortgage and mortgage-backed security market has been prepayment risk. Various innovations have arisen to deal with it but none hedge it fully. The Rent-To-Own (RTO) mortgage discussed here is a mortgage instrument that reduces or even reverses prepayment risk. It does so by creating an incentive structure within the framework of the mortgage contract that penalizes prepayment when interest rates are low and rewards it when interest rates are high. This is the opposite of standard mortgages. The RTO incentive structure is based on a unique buyout feature. Borrowers who want to buy out the financial interest of the lender may do so whenever they want, but the buyout price is a negative function of the market interest rates prevailing currently, that is, at the time of the buyout. Hence the lower these rates, the higher the buyout price. Other advantages of the RTO mortgage are also described.     

A meta‐level analysis of major trends in environmental health risk governance

Internationally but also within countries, large differences exist regarding how environmental health risks (EHRs) are governed. Despite these differences, at a meta‐level some general trends can be discerned that may point to a convergence of EHR governance regimes. One, EHR governance regimes are increasingly taking into account cost‐benefit considerations, sectoral goals outside the health risk domain, public concerns and stakeholder interests in early stages of decision‐making. Two, EHR objectives are increasingly integrated in other, sectoral policies such as land use planning. Three, an increased differentiation of EHR standards is observed (partly as a consequence of the former characteristic). Still little systematic empirical research has been conducted on the dynamics in EHR governance regimes and their causes, on what EHR governance regimes have produced in terms of (perceived) risk reduction and on how these results can be explained. This paper proposes a systematic framework for analysing, explaining and evaluating shifts in EHR governance regimes. The framework in turn is applied to examine and understand the shift towards more integrated and differentiated EHR governance regimes.     

Evaluating an analytic–deliberative risk‐ranking process in a Chinese context

In previous research, a deliberative process for integrating stakeholder perspectives in the ranking of risks was introduced and empirically tested with lay groups composed predominantly of Americans. In this paper, we explore the viability of this process with lay groups of Chinese, because previous research has shown that Americans and Chinese differ substantially along many dimensions of cognition and social organization relevant to decision‐making. Using 10 environmental hazards based on current Chinese environmental regulatory programs as the risk domain, five groups of 8–9 participants ranked hazards using both holistic and multi‐attribute approaches. Results show that (1) risk rankings from the holistic and multi‐attribute approaches are consistent, (2) participants indicate that they are satisfied with the procedures and resulting rankings, and (3) agreement between participants increases over the course of the ranking exercise. Results for Chinese participants were compared with previously reported results for Americans to look for cultural effects involving deference to technical expertise and quantitative analysis, and skepticism toward public participation in policy‐making. Although there were some hints of cultural differences, neither difference significantly affected measures of the method’s validity or replicability. Because this process offers a scientifically sound and measured approach to stakeholder involvement in risk management, it may be attractive to Chinese leaders as they respond to growing demand for public participation in the policy‐making process. Whether Chinese citizens would consider the process described here to be satisfactory in a real policy context remains to be tested.     

Cattle farmers’ perceptions of risk and risk management strategies: evidence from Northern Ethiopia

This study analyzes cattle farmers’ perceptions of risk and risk management strategies in Tigray, Northern Ethiopia. We use survey data from a sample of 356 farmers based on multistage random sampling. Factor analysis is employed to classify scores of risk and management strategies, and multiple regression is then used to investigate the relationship between scores and farmers’ characteristics. The results demonstrate that shortage of family labor, high price of fodder, and limited farm income were perceived as the most important risks. Use of veterinary services, parasite control, and loan utilization were perceived as the most important strategies for managing risks. Livestock disease and labor shortage were perceived as less of a risk by farmers who adopted the practice of zero grazing compared to other farmers, pointing to the potential of this practice for risk reduction. We find strong evidence that farmers engage in multiple risk management practices in order to reduce losses from cattle morbidity and mortality. The results suggest that government strategies that aim at reducing farmers’ risk need to be tailored to specific farm and farmer characteristics. Findings from this study have potentially important policy implications for risk management strategies in developing countries.     

Feeling good,feeling bad,and feeling at‐risk: a review of incidental affect's influence on likelihood estimates of health hazards and life events

The recent increased interest among researchers in the ways in which emotion, mood, and affect influence risk perceptions is an important step in better understanding how people understand and perceive health risk information. However, the literature involving incidental affect (ambient mood) is not as well known. The 23 years of research examining incidental affect's influence on likelihood estimates of health hazards and life events has not previously been integrated and examined critically. This comprehensive review found that incidental affect influenced likelihood estimates in a predictable way. Individuals experiencing positive affect made more optimistic likelihood estimates than did individuals experiencing negative affect. Individuals experiencing negative affect made more pessimistic likelihood estimates than did individuals experiencing positive affect. Anger was unique among negatively valenced emotions by influencing judgments in the same way as positive affect (i.e., relatively optimistic likelihood estimates). Three theoretical explanations are offered, including one that addresses the role of anger specifically.