Understanding Cumulative Risk Perception from Judgments and Choices: An Application to Flood Risks

Catastrophic events, such as floods, earthquakes, hurricanes, and tsunamis, are rare, yet the cumulative risk of each event occurring at least once over an extended time period can be substantial. In this work, we assess the perception of cumulative flood risks, how those perceptions affect the choice of insurance, and whether perceptions and choices are influenced by cumulative risk information. We find that participants' cumulative risk judgments are well represented by a bimodal distribution, with a group that severely underestimates the risk and a group that moderately overestimates it. Individuals who underestimate cumulative risks make more risk‐seeking choices compared to those who overestimate cumulative risks. Providing explicit cumulative risk information for relevant time periods, as opposed to annual probabilities, is an inexpensive and effective way to improve both the perception of cumulative risk and the choices people make to protect against that risk.     

Cultural Values,Trust, and Benefit‐Risk Perceptions of Hydraulic Fracturing: A Comparative Analysis of Policy Elites and the General Public

Hydraulic fracturing (“fracking”) has recently become a very intensely debated process for extracting oil and gas. Supporters argue that fracking provides positive economic benefits and energy security and offers a decreased reliance on coal‐based electricity generation. Detractors claim that the fracking process may harm the environment as well as place a strain on local communities that experience new fracking operations. This study utilizes a recently conducted survey distributed to a sample of policy elites and the general public in Arkansas and Oregon to examine the role of cultural value predispositions and trust in shaping the perceptions of risks and benefits associated with fracking. Findings indicate that cultural values influence both trust and benefit‐risk perceptions of fracking for both policy elites and the general public. More specifically, we found that trust in information from various sources is derived from the intrinsic values held by an individual, which in turn impacts perceptions of related benefits and risks. We also found that while the overall pattern of relationships is similar, trust plays a larger role in the formulation of attitudes for policy elites than for the general public. We discuss the implications of the mediating role of trust in understanding value‐driven benefit‐risk perceptions, as well as the disparate role of trust between policy elites and the general public in the context of the policy‐making process for both theory and practice.     

Perception of Climate Risk among Rural Farmers in Vietnam: Consistency within Households and with the Empirical Record

Rural farmers in Vietnamese communes perceive climate risk and potential impacts on livelihood within a complex context that may influence individual and household decisions. In a primary survey of 1,145 residents of the Thach Ha district of Ha Tinh province, we gathered data regarding perception about stability in climate, potential risks to livelihood, demographic characteristics, orientation toward risk, and interest in expanding economic activity. Temporal analysis of meteorological and economic indicator data forms an empirical basis for comparison with human perception. We ask the basic question: Are rural farmers’ perceptions of climate consistent with the historical record and reproducible within households? We find that respondents do perceive climate anomalies, with some anchoring on recent extreme events as revealed by climate observational data, and further that spouses disproportionately share perceptions relative to randomly simulated pairings. To put climate‐related risk perception in a larger context, we examine patterns across a range of risks to livelihood faced by farmers (livestock disease, pests, markets, health), using dimension reduction techniques. We find that our respondents distinguish among potential causes of low economic productivity, with substantial emphasis on climate‐related impacts. They do not express uniform concern across risks, but rather average patterns reveal common modes and distinguish climate concern. Still, among those expressing concern about climate‐related risks to livelihood we do not find an association with expressed intention to pursue changes in economic activity as a risk management response.     

Perceived Risk and Benefit of Nuclear Waste Repositories: Four Opinion Clusters

Local public resistance can block the site‐selection process, construction, and operation of nuclear waste repositories. Social science has established that the perception of risks and benefits, trust in authorities, and opinion on nuclear energy play important roles in acceptance. In particular, risk and benefit evaluations seem critical for opinion formation. However, risks and benefits have rarely been studied independently and, most often, the focus has been on the two most salient groups of proponents and opponents. The aim of this exploratory study is to examine the often‐neglected majority of people holding ambivalent or indifferent opinions. We used cluster analysis to examine the sample (N = 500, mailed survey in German‐speaking Switzerland) in terms of patterns of risk and benefit perception. We reveal four significantly different and plausible clusters: one cluster with high‐benefit ratings in favor of a repository and one cluster with high‐risk ratings opposing it; a third cluster shows ambivalence, with high ratings on both risk and benefit scales and moderate opposition, whereas a fourth cluster seems indifferent, rating risks and benefits only moderately compared to the ambivalent cluster. We conclude that a closer look at the often neglected but considerable number of people with ambivalent or indifferent opinions is necessary. Although the extreme factions of the public will most probably not change their opinion, we do not yet know how the opinion of the ambivalent and indifferent clusters might develop over time.     

Risk Perception in the U.K. Oil and Gas Production Industry: Are Expert Loss‐Prevention Managers' Perceptions Different From Those of Members of the Public?

This article investigates potential differences in risk perception between experts (loss-prevention managers in the U.K. oil and gas production industry) and nonexperts (managers and students). Extant research on expert versus nonexpert perceptions of risk is reviewed, followed by the present study concerning risk perceptions of seven pen-picture scenarios involving the occurrence of hazardous events in the U.K. oil and gas production industry. In contrast to many of the earlier studies of expert versus nonexpert perceptions of risk, the present analysis concludes that experts did not judge the overall riskiness of the portrayed hazardous events as less risky than the nonexperts. Nevertheless, the experts believe more strongly than our nonexperts that the risks portrayed in the scenarios pose little threat to future generations, are more precisely known, and are relatively controllable. Use of multiple regression analysis to help uncover the basis of overall riskiness assessments for expert and lay respondents was inconclusive, however. Finally, little evidence was found that nonexperts were any more heterogeneous in their risk perceptions than experts. It may be that the nature of the risks assessed in the present study may account for the general lack of clear expert versus nonexpert differences in overall perceptions of the riskiness of hazardous events in the North Sea. Earlier findings of strong expert versus nonexpert differences in risk perception assessed hazards of major public concern. It is inferred that using such extreme hazards may have resulted in an exaggerated view of differences in expert versus public (nonexpert) perception of risk.     

Understanding Gaps Between the Risk Perceptions of Wildland–Urban Interface (WUI) Residents and Wildfire Professionals

Research across a variety of risk domains finds that the risk perceptions of professionals and the public differ. Such risk perception gaps occur if professionals and the public understand individual risk factors differently or if they aggregate risk factors into overall risk differently. The nature of such divergences, whether based on objective inaccuracies or on differing perspectives, is important to understand. However, evidence of risk perception gaps typically pertains to general, overall risk levels; evidence of and details about mismatches between the specific level of risk faced by individuals and their perceptions of that risk is less available. We examine these issues with a paired data set of professional and resident assessments of parcel‐level wildfire risk for private property in a wildland–urban interface community located in western Colorado, United States. We find evidence of a gap between the parcel‐level risk assessments of a wildfire professional and numerous measures of residents’ risk assessments. Overall risk ratings diverge for the majority of properties, as do judgments about many specific property attributes and about the relative contribution of these attributes to a property's overall level of risk. However, overall risk gaps are not well explained by many factors commonly found to relate to risk perceptions. Understanding the nature of these risk perception gaps can facilitate improved communication by wildfire professionals about how risks can be mitigated on private lands. These results also speak to the general nature of individual‐level risk perception.     

The Perceived Health Risks of Indoor Radon Gas and Overhead Powerlines: A Comparative Multilevel Approach

Radon and overhead powerlines are two radiation risk cases that have raised varying levels of concern among the general public and experts. Despite both involving radiation—a typically feared and unseen health hazard—individuals' perceptions of the two risk cases may invoke rather different factors. We examined individual and geographic-contextual factors influencing public perceptions of the health risks of indoor radon gas and overhead powerlines in a comparative research design, utilizing a postal questionnaire with 1,528 members of the general public (response rate 28%) and multilevel modeling techniques. This study found that beliefs about the two risk cases mainly differed according to the level of "exposure"—defined here in terms of spatial proximity. We argue that there are two alternative explanations for this pattern of findings: that risk perception itself varies directly with proximity, or that risk is more salient to concerned people in the exposed areas. We also found that while people living in high radon areas are more concerned about the risks of indoor radon gas, they find these risks more acceptable and have more trust in authorities. These results might reflect the positive effects of successive radon campaigns in high radon areas, which may have raised awareness and concern, and at the same time may have helped to increase trust by showing that the government takes the health risks of indoor radon gas seriously, suggesting that genuine risk communication initiatives may have positive impacts on trust in risk management institutions.     

Confluence and Contours: Reflexive Management of Environmental Risk

Government institutions have responsibilities to distribute risk management funds meaningfully and to be accountable for their choices. We took a macro‐level sociological approach to understanding the role of government in managing environmental risks, and insights from micro‐level psychology to examine individual‐level risk‐related perceptions and beliefs. Survey data from 2,068 U.K. citizens showed that lay people's funding preferences were associated positively with beliefs about responsibility and trust, yet associations with perception varied depending on risk type. Moreover, there were risk‐specific differences in the funding preferences of the lay sample and 29 policymakers. A laboratory‐based study of 109 participants examined funding allocation in more detail through iterative presentation of expert information. Quantitative and qualitative data revealed a meso‐level framework comprising three types of decisionmakers who varied in their willingness to change funding allocation preferences following expert information: adaptors, responders, and resistors. This research highlights the relevance of integrated theoretical approaches to understanding the policy process, and the benefits of reflexive dialogue to managing environmental risks.     

Parenthood and Worrying About Climate Change: The Limitations of Previous Approaches

The present study considers the correlation between parenthood and worry about the consequences of climate change. Two approaches to gauging people's perceptions of the risks of climate change are compared: the classic approach, which measures risk perception, and the emotion‐based approach, which measures feelings toward a risk object. The empirical material is based on a questionnaire‐based survey of 3,529 people in Sweden, of whom 1,376 answered, giving a response rate of 39%. The results show that the correlation of parenthood and climate risk is significant when the emotional aspect is raised, but not when respondents were asked to do cognitive estimates of risk. Parenthood proves significant in all three questions that measure feelings, demonstrating that it is a determinant that serves to increase worry about climate change.     

Returns Policy and Quality Risk in E‐Business

In this article, we investigate the interplay between returns policy, pricing strategy, and quality risk. We define quality risk as the possibility of product misfit, defect, or unconformity with the consumers’ perception. These notions of quality risks differ in return policy restriction, residual values, and whether it is possible to unambiguously reduce the probability of mismatch. Using a stylized two‐segment market setting, we demonstrate that consumer returns are offered only when the high‐segment consumers incur a higher hassle cost, and both the quality risk and the valuation of the low segment are moderate. Moreover, it is possible to wisely design the returns policy that eliminates all inappropriate returns. Furthermore, the seller with a high‐quality risk may offer a refund that exceeds the selling price, which provides a theoretical ground and specific operating regime for the satisfaction guaranteed policy used in some e‐tailers. In contrast, when the quality risk is relatively low, further improvement on mitigating the quality risk may not necessarily benefit the seller. Finally, we observe that the restocking fee may be non‐monotonic in product quality; thus, a more generous returns policy does not necessarily indicate a lower quality risk.     

How Does the General Public Evaluate Risk Information? The Impact of Associations with Other Risks

There is a considerable body of knowledge about the way people perceive risks using heuristics and qualitative characteristics, and about how risk information should be communicated to the public. However, little is known about the way people use the perception of known risks (associated risks) to judge an unknown risk. In a first, qualitative study, six different risks were discussed in in-depth interviews and focus group interviews. The interviews showed that risk associations played a prominent role in forming risk perceptions. Associated risks were often mentioned spontaneously. Second, a survey study was conducted to confirm the importance of risk associations quantitatively. This study investigated whether people related unknown risks to known risks. This was indeed confirmed. Furthermore, some insight was gained into how and why people form risk associations. Results showed that the semantic category of the unknown risks was more important in forming associations than the perceived level of risk or specific risk characteristics. These findings were in line with the semantic network theory. Based on these two studies, we recommend using the mental models approach in developing new risk communications.     

Determinants and Mapping of Collective Perceptions of Technological Risk: The Case of the Second Nuclear Power Plant in Taiwan

Nuclear power is a highly controversial and salient example of environmental risk. The siting or operating of a nuclear power plant often faces widespread public opposition. Although studies of public perceptions of nuclear power date back to 1970s, little research attempts to explain the spatial heterogeneity of risk attitude toward nuclear power among individuals or communities. This article intends to improve the knowledge about the major factors contributing to nuclear power plant risk perceptions by mapping the geographical patterns of local risk perception and examining the determinants in forming the nature and distribution of the perceived risk among potentially affected population. The analysis was conducted by a case study of the Second Nuclear Power Plant (SNPP) in Taiwan by using a novel methodology that incorporates a comprehensive risk perception (CRP) model into an ethnographic approach called risk perception mapping (RPM). First, we examined the determinants of local nuclear power risk perceptions through the CRP model and multivariate regression analysis. Second, the results were integrated with the RPM approach to map and explain the spatial pattern of risk perceptions. The findings demonstrate that the respondents regard the nuclear power plant as an extremely high‐risk facility, causing them to oppose the SNPP and reject the compensation payment to accept its continuing operation. Results also indicate that perceptions of nuclear power risk were mainly influenced by social trust, psychological and socioeconomic attributes, proximity, and the perceived effects of the SNPP on the quality of everyday life.     

Changing Forest Disturbance Regimes and Risk Perceptions in Homer, Alaska

Forest disturbances caused by insects can lead to other disturbances, risks, and changes across landscapes. Evaluating the human dimensions of such disturbances furthers understanding of integrated changes in natural and social systems. This article examines the effects of changing forest disturbance regimes on local risk perceptions and attitudes in Homer, Alaska. Homer experienced a spruce bark beetle (Dendroctonus rufipennis) outbreak with large-scale tree mortality and a 5,000-acre fire in 2005. Qualitative interviews and quantitative analysis of mail surveys are used to examine community risk perception and relationships with land managers pre- and post-fire. Results show a decrease in the saliency of the spruce bark beetle as a community issue, a coalescence of community risk perceptions about fire, and conflicting findings about satisfaction with land managers and its relationship with risk perception.     

Communicating Risks and Benefits from Fish Consumption: Impact on Belgian Consumers' Perception and Intention to Eat Fish

Communicating about the health effects of fish and seafood may potentially result in a conflict situation: increasing intake is desirable because of health and nutritional benefits, but higher consumption may also lead to an increased intake of potentially harmful environmental contaminants. In order to anticipate the communication challenge this conflict may pose, the research presented here aimed to assess the impact of risk/benefit communication on Belgian consumers' fish consumption behavior and fish attribute perception. Data were collected in June 2005 from a sample of 381 women, aged between 20 and 50 years. An experimental design consisting of four message conditions (benefit‐only; risk‐only; benefit‐risk; and risk‐benefit) combined with three information sources (fish and food industry; consumer organization; government) was used. Exposure to the benefit‐only message resulted in an increase from a self‐reported fish consumption frequency of 4.2 times per month to an intended fish consumption frequency of 5.1 times per month (+21%), while fish attribute perceptions only marginally improved. The risk‐only message resulted in a strong negative perceptual change in the range of two points on a seven‐point scale. This translated into an 8% decrease of behavioral intention (from eating fish 4.5 times per month to an intention of eating fish 4.1 times per month). Balanced messages referring to both risks and benefits yielded no significant change in behavioral intention, despite a significant worsening of fish attribute perception. The presentation order of benefits and risks in the balanced message showed a tendency to affect both behavioral intention and attribute perception, with the first message component being most influential. Information source did not yield any significant impact either on behavioral intention or on attribute perceptions, independent of the message content. The results from this study provide valuable insights for future risk/benefit and balanced communication about seafood.     

European Public Perceptions of Food Risk: Cross-National and Methodological Comparisons

This article presents a comparative study of public perceptions of food risk across 25 European member states. A secondary data analysis is conducted on a Eurobarometer survey fielded to nationally representative samples in 2005. The survey included closed questions as well as free associations to map risk perceptions. Taking a quantitative approach, we find that people in a majority of European countries express similar levels of concern about food risks. However, outside this majority a North-South divide is evident, with the Northern countries worrying less than the Southern countries. Multilevel modeling shows that cross-national differences in individual respondents' level of worry are in part attributable to shared country effects and to generalized risk sensitivity about a range of personal risks. On the underlying structure of food risk concerns, factor analysis points to three dimensions described by groupings of risks related to adulteration and contamination, health effects, and production and hygiene. A qualitative analysis of respondents' free associations about problems and risks with food identifies three major themes that are consistent with the quantitative results. However, the free associations also point toward greater cross-national diversity and to striking variations in the range and importance of food risks. Overall, the picture is of a public that frames food risks in a wider context of beliefs about the links between diet and health. We conclude with some implications for research on food risk perceptions in particular and risk perception studies in general.     

Consumer Risk Perceptions Toward Agricultural Biotechnology, Self-Protection, and Food Demand: The Case of Milk in the United States

This study is an econometric systems approach to modeling the factors and linkages affecting risk perceptions toward agricultural biotechnology, self-protection actions, and food demand. This model is applied to milk in the United States, but it can be adapted to other products as well as other categories of risk perceptions. The contribution of this formulation is the ability to examine how explanatory factors influence risk perceptions and whether they translate into behavior and ultimately what impact this has on aggregate markets. Hadden's outrage factors on heightening risk perceptions are among the factors examined. In particular, the article examines the role of labeling as a means of permitting informed consent to mitigate outrage factors. The effects of attitudinal, economic, and demographic factors on risk perceptions are also explored, as well as the linkage between risk perceptions, consumer behavior, and food demand. Because risk perceptions and self-protection actions are categorical variables and demand is a continuous variable, the model is estimated as a two-stage mixed system with a covariance correction procedure suggested by Amemiya. The findings indicate that it is the availability of labeling, not the price difference, between that labeled milk and milk produced with recombinant bovine Somatotropin (rbST) that significantly affects consumer's selection of rbST-free milk. The results indicate that greater availability of labeled milk would not only significantly increase the proportion of consumers who purchased labeled milk, its availability would also reduce the perception of risk associated with rbST, whether consumers purchase it or not. In other words, availability of rbST-free milk translates into lower risk perceptions toward milk produced with rbST.     

An Empirical Study of the Volkswagen Crisis in China: Customers’ Information Processing and Behavioral Intentions

Product‐harm crises usually lead to product recalls, which may cause consumers concern about the product quality and safety. This study systematically examines customers’ immediate responses to the Volkswagen product recall crisis in China. Particular attention was given to customers’ responses to the risk information influencing their behavioral intentions. By combining the protective action decision model and the heuristic‐systematic model, we constructed a hypothetical model to explore this issue. A questionnaire survey was conducted to collect data involving 467 participants drawn from the customers of Volkswagen. We used structural equation modeling to explore the model. The results show that customers’ product knowledge plays an important role in their responses to the crisis. Having more knowledge would make them perceive a lower risk, but they might need even more information, making them more likely to seek and process information, and subsequently increasing their positive behavioral intentions toward the firm (that is pro‐firm behavioral intentions). Risk perception increased customers’ information needs, information seeking, and information processing but decreased their pro‐firm behavioral intentions. In addition to promoting information seeking, information needed to also facilitate customers’ systematic processing and thus increase their behavioral intentions to take corrective action. Customers’ behavioral intentions were also spurred by systematic processing, but failed to be predicted by information seeking. In summary, theoretical and practical implications and suggestions for further research are also discussed.     

A Risk Analysis Model in Concurrent Engineering Product Development

Concurrent engineering has been widely accepted as a viable strategy for companies to reduce time to market and achieve overall cost savings. This article analyzes various risks and challenges in product development under the concurrent engineering environment. A three‐dimensional early warning approach for product development risk management is proposed by integrating graphical evaluation and review technique (GERT) and failure modes and effects analysis (FMEA). Simulation models are created to solve our proposed concurrent engineering product development risk management model. Solutions lead to identification of key risk controlling points. This article demonstrates the value of our approach to risk analysis as a means to monitor various risks typical in the manufacturing sector. This article has three main contributions. First, we establish a conceptual framework to classify various risks in concurrent engineering (CE) product development (PD). Second, we propose use of existing quantitative approaches for PD risk analysis purposes: GERT, FMEA, and product database management (PDM). Based on quantitative tools, we create our approach for risk management of CE PD and discuss solutions of the models. Third, we demonstrate the value of applying our approach using data from a typical Chinese motor company.