Radon Risk Information and Voluntary Protection: Evidence from a Natural Experiment

This study examines the perceived risks and mitigating behavior of Maine households who received new information on their exposures to significant health risks from indoor radon. The observed responses of these households illustrate conceptual issues related to designing an effective risk information program. Despite the involvement of generally well-motivated homeowners and well-intentioned researchers and government officials, we conclude that the risk information approach used in Maine failed to induce appropriate, cost-effective voluntary protection. The results indicate that, after receiving radon test results, information on associated health risks, and suggestions on how to reduce exposures: perceived risks tended to understate objective risks by orders of magnitude, and there was no statistically significant relationship between mitigating behavior and objective risks. These results suggest that the formation of risk perceptions and subsequent behavioral adjustments involve complex interactions among information, contextual, socioeconomic, and psychological variables. Therefore, government programs that seek to reduce health and safety risks with information programs, instead of using more conventional enforced standards, must be crafted very carefully to accommodate this complex process.     

The Power of Perception: Health Risk Attributed to Air Pollution in an Urban Industrial Neighbourhood

This paper describes a multi-stakeholder process designed to assess the potential health risks associated with adverse air quality in an urban industrial neighborhood. The paper briefly describes the quantitative health risk assessment conducted by scientific experts, with input by a grassroots community group concerned about the impacts of adverse air quality on their health and quality of life. In this case, rather than accept the views of the scientific experts, the community used their powers of perception to advantage by successfully advocating for a professionally conducted community health survey. This survey was designed to document, systematically and rigorously, the health risk perceptions community members associated with exposure to adverse air quality in their neighborhood. This paper describes the institutional and community contexts within which the research is situated as well as the design, administration, analysis, and results of the community health survey administered to 402 households living in an urban industrial neighborhood in Hamilton, Ontario, Canada. These survey results served to legitimate the community's concerns about air quality and to help broaden operational definitions of health. In addition, the results of both health risk assessment exercises served to keep issues of air quality on the local political agenda. Implications of these findings for our understanding of the environmental justice process as well as the ability of communities to influence environmental health policy are discussed.     

Risk Analysis in Developing Countries1

In summary, risk analysis is not yet well practiced in developing countries, although there are numerous, diverse environmental and other risk-related issues and concerns that need attention. A few initiatives have been taken, but, so far, they have created only relatively small impact in a few areas. Many risk issues may not be addressed, partly as a result of lack of resources and inadequate knowledge by policy makers. Risk analysis is an essential tool for the planning and implementation of development projects. To enhance its use, however, risk analysis approaches and methods must be adapted to developing countries, and this requires research. Unfortunately, funds for research, in general, are hard to find. There are other problems in the implementation of risk analysis. Trained professionals on risk analysis are few. Existing institutions that are tasked with resolving environmental and other risk issues are overburdened. Risk-related data are sorely lacking. Resources are very limited for addressing numerous natural and technological hazards. In most developing countries, political and economic stability is still threatened by both internal and external forces, hence, that is what receives priority attention. Activities like risk analysis, which generally lead to long-term results and benefits, do not get enough interest. In addition, there is still little public awareness of risks even among those who have passed the stage of survival; thus, there is little public concern about them. We cannot afford this lack of concern for long. In the Philippines, the government was the first to recognize after our peaceful revolution in 1986 that “the environmental issues can add fuel to the insurgency; they can also hamper efforts towards national recovery”.⁽⁴⁾ To this point, I have added that risk management (including risk assessment and risk communication), like attainment of peace and freedom, is a social imperative because risk issues affect our health, safety, and both our physical and economic well-being.⁽⁷⁾ Many of such issues in developing countries have not only local, but also global origin and impacts. They thus deserve the interest of each of us.     

Pensions,Growth and Concern about the Young

Within an overlapping generations framework, we show that the proportion of old age consumption financed by a pay-as-you-go system can be neutral with respect to the growth path of the economy in the presence of intergenerational transfers implemented by altruistic households or by a fiscal authority. The crucial impact on growth of society's propensity to favour the elderly is discussed. Furthermore, we offer an explanation for the existence of an authority redistributing income among generations when households are selfish. This concerns the fact that it is impossible for young agents to precommit themselves not to ask for some redistribution in their favour when old.     

EPA Underestimates,Oversimplifies, Miscommunicates,and Mismanages Cancer Risks by Ignoring Human Susceptibility

If exposed to an identical concentration of a carcinogen, every human being would face a different level of risk, determined by his or her genetic, environmental, medical, and other uniquely individual characteristics. Various lines of evidence indicate that this susceptibility variable is distributed rather broadly in the human population, with perhaps a factor of 25‐ to 50‐fold between the center of this distribution and either of its tails, but cancer risk assessment at the EPA and elsewhere has always treated every (adult) human as identically susceptible. The National Academy of Sciences “Silver Book” concluded that EPA and the other agencies should fundamentally correct their mis‐computation of carcinogenic risk in two ways: (1) adjust individual risk estimates upward to provide information about the upper tail; and (2) adjust population risk estimates upward (by about sevenfold) to correct an underestimation due to a mathematical property of the interindividual distribution of human susceptibility, in which the susceptibility averaged over the entire (right‐skewed) population exceeds the median value for the typical human. In this issue of Risk Analysis, Kenneth Bogen disputes the second adjustment and endorses the first, though he also relegates the problem of underestimated individual risks to the realm of “equity concerns” that he says should have little if any bearing on risk management policy. In this article, I show why the basis for the population risk adjustment that the NAS recommended is correct—that current population cancer risk estimates, whether they are derived from animal bioassays or from human epidemiologic studies, likely provide estimates of the median with respect to human variation, which in turn must be an underestimate of the mean. If cancer risk estimates have larger “conservative” biases embedded in them, a premise I have disputed in many previous writings, such a defect would not excuse ignoring this additional bias in the direction of underestimation. I also demonstrate that sensible, legally appropriate, and ethical risk policy must not only inform the public when the tail of the individual risk distribution extends into the “high‐risk” range, but must alter benefit‐cost balancing to account for the need to try to reduce these tail risks preferentially.     

The Use of Individual and Societal Risk Criteria Within the Dutch Flood Safety Policy—Nationwide Estimates of Societal Risk and Policy Applications

The Dutch government is in the process of revising its flood safety policy. The current safety standards for flood defenses in the Netherlands are largely based on the outcomes of cost‐benefit analyses. Loss of life has not been considered separately in the choice for current standards. This article presents the results of a research project that evaluated the potential roles of two risk metrics, individual and societal risk, to support decision making about new flood safety standards. These risk metrics are already used in the Dutch major hazards policy for the evaluation of risks to the public. Individual risk concerns the annual probability of death of a person. Societal risk concerns the probability of an event with many fatalities. Technical aspects of the use of individual and societal risk metrics in flood risk assessments as well as policy implications are discussed. Preliminary estimates of nationwide levels of societal risk are presented. Societal risk levels appear relatively high in the southwestern part of the country where densely populated dike rings are threatened by a combination of river and coastal floods. It was found that cumulation, the simultaneous flooding of multiple dike rings during a single flood event, has significant impact on the national level of societal risk. Options for the application of the individual and societal risk in the new flood safety policy are presented and discussed.     

Generalized Utilitarianism and Harsanyi's Impartial Observer Theorem

Harsanyi's impartial observer must consider two types of lotteries: imaginary identity lotteries (“accidents of birth”) that she faces as herself and the real outcome lotteries (“life chances”) to be faced by the individuals she imagines becoming. If we maintain a distinction between identity and outcome lotteries, then Harsanyi‐like axioms yield generalized utilitarianism, and allow us to accommodate concerns about different individuals' risk attitudes and concerns about fairness. Requiring an impartial observer to be indifferent as to which individual should face similar risks restricts her social welfare function, but still allows her to accommodate fairness. Requiring an impartial observer to be indifferent between identity and outcome lotteries, however, forces her to ignore both fairness and different risk attitudes, and yields a new axiomatization of Harsanyi's utilitarianism.     

Opportunities and Impediments for Risk-Based Standards: Some Views from a Workshop

Techniques for performing scientific risk assessments for a wide variety of chemical and radiological hazards present in the environment and workplace are available. Speakers at a workshop sponsored by the Environmental and Public/Occupational Health Standard's Steering Group addressed both the state-of-the-art in risk assessment and areas of difficulty that require further research. The Steering Group concluded that within the limits of the available data, risk-assessment techniques are a useful tool in decision-making. In the past, many government agencies have not been effective either in listening to public concerns or in communicating technical or scientific information about risks. This has been true at all levels of government. Workshop speakers discussed some ways that government agencies can more effectively communicate with the public. The Steering Group concluded that major efforts must be made to ensure that two-way communication takes place. Thus the results of the workshop show that effective management of risk requires both a scientific assessment of risk and a responsive consideration of the public's perception of risk. Intensive efforts must be made to ensure that effective two-way communication takes place between members of the public and the appropriate government agencies.     

IMMIGRATION,WAGES, AND COMPOSITIONAL AMENITIES

There is strong public opposition to increased immigration throughout Europe. Given the modest economic impacts of immigration estimated in most studies, the depth of anti‐immigrant sentiment is puzzling. Immigration, however, does not just affect wages and taxes. It also changes the composition of the local population, threatening the compositional amenities that natives derive from their neighborhoods, schools, and workplaces. In this paper we use a simple latent‐factor model, combined with data for 21 countries from the 2002 European Social Survey (ESS), to measure the relative importance of economic and compositional concerns in driving opinions about immigration policy. The ESS included a unique battery of questions on the labor market and social impacts of immigration, as well as on the desirability of increasing or reducing immigrant inflows. We find that compositional concerns are 2–5 times more important in explaining variation in individual attitudes toward immigration policy than concerns over wages and taxes. Likewise, most of the difference in opinion between more‐ and less‐educated respondents is attributable to heightened compositional concerns among people with lower education.     

Risk and Planning in Agriculture: How Planning on Dairy Farms in Ireland Is Affected by Farmers’ Regulatory Focus

This article examines how planning on dairy farms is affected by farmers' motivation. It argues that farmers' choice of expansion strategies can be specified in terms of risk decision making and understood as either prevention‐focused or promotion‐focused motivation. This relationship was empirically examined using mediated regression analyses where promotion/prevention focus was the independent variable and its effect on total milk production via planned expansion strategies was examined. The results indicate that promotion focus among farmers has an indirect effect on farm expansion via planning strategies that incur greater risk to the farm enterprise. Regulatory focus on the part of farmers has an influence on farmers' planning and risk management activities and must be accounted for in the design and implementation of policy and risk management tools in agriculture.     

Chemical and Radiation Environmental Risk Management: Differences, Commonalities, and Challenges

Driven by differing statutory mandates and programmatic separation of regulatory responsibilities between federal, state, and tribal agencies, distinct chemical and radiation risk management strategies have evolved. In the field this separation poses real challenges since many of the major environmental risk management decisions we face today require the evaluation of both types of risks. Over the last decade, federal, state, and tribal agencies have continued to discuss their different approaches and explore areas where their activities could be harmonized. The current framework for managing public exposures to chemical carcinogens has been referred to as a "bottom up approach." Risk between 10(-4) and 10(-6) is established as an upper bound goal. In contrast, a "top down" approach that sets an upper bound dose limit and couples with site specific As Low As Reasonably Achievable Principle (ALARA), is in place to manage individual exposure to radiation. While radiation risk are typically managed on a cumulative basis, exposure to chemicals is generally managed on a chemical-by-chemical, medium-by-medium basis. There are also differences in the nature and size of sites where chemical and radiation contamination is found. Such differences result in divergent management concerns. In spite of these differences, there are several common and practical concerns among radiation and chemical risk managers. They include 1) the issue of cost for site redevelopment and long-term stewardship, 2) public acceptance and involvement, and 3) the need for flexible risk management framework to address the first two issues. This article attempts to synthesize key differences, opportunities for harmonization, and challenges ahead.     

RELATIVE RISK AVERSION IS CONSTANT: EVIDENCE FROM PANEL DATA

Most classical tests of constant relative risk aversion (CRRA) based on individual portfolio composition use cross‐sectional data. Such tests must assume that the distributions of wealth and preferences are independent. We use panel data to analyze how individuals’ portfolio allocation between risky and riskless assets varies in response to changes in total financial wealth. We find the elasticity of the risky asset share to wealth to be small and statistically insignificant, supporting the CRRA assumption; this finding is robust when the sample is restricted to households experiencing large income variations. In addition, we find a small but significant negative correlation between wealth and risk aversion. Various extensions are discussed.     

Insurability and Mitigation of Flood Losses in Private Households in Germany

In Germany, flood insurance is provided by private insurers as a supplement to building or contents insurance. This article presents the results of a survey of insurance companies with regard to eligibility conditions for flood insurance changes after August 2002, when a severe flood caused 1.8 billion euro of insured losses in the Elbe and the Danube catchment areas, and the general role of insurance in flood risk management in Germany. Besides insurance coverage, governmental funding and public donations played an important role in loss compensation after the August 2002 flood. Therefore, this article also analyzes flood loss compensation, risk awareness, and mitigation in insured and uninsured private households. Insured households received loss compensation earlier. They also showed slightly better risk awareness and mitigation strategies. Appropriate incentives should be combined with flood insurance in order to strengthen future private flood loss mitigation. However, there is some evidence that the surveyed insurance companies do little to encourage precautionary measures. To overcome this problem, flood hazards and mitigation strategies should be better communicated to both insurance companies and property owners.     

Managing Risk: A Joint U.S.-German Perspective

Ideas from a USA-FRG conference on risk management are presented. In general, the difficulties confronted by risk management authorities in the two countries are similar, from discovering important risks at an early stage to setting acceptable goals. Government regulation is overburdened and somewhat inefficient in both countries, leading to greater search for alternatives. The many differences in approach between the two countries can inform both. German risk management is done largely through negotiations among the affected parties; when this does not resolve a dispute, a specialized administrative court takes charge. In both countries nonregulatory methods of managing risk should be enhanced and given a larger role. A matrix of risk management method versus criteria proved stimulating in comparing and ranking approaches. The conceptual differences between managing discrete events (auto crashes, boiler explosions, etc.) and chronic exposures have not been appreciated. Although uncertainty and probability are involved in both, there are qualitative differences in both analysis and management. Public perceptions of risk and the role these should play have been characterized by "objectivist" and "subjectivist" positions. In the former view, risks are subject to analysis, are calculable, and the public must be educated to accept the conclusions of experts. In the latter view what people perceive is what is most important, both psychologically and politically, and the risk experts must understand public fears and desires. These are important opportunities for cross cultural studies.     

Socioeconomic Vulnerability and Adaptation to Environmental Risk: A Case Study of Climate Change and Flooding in Bangladesh

In this article we investigate the complex relationship between environmental risk, poverty, and vulnerability in a case study carried out in one of the poorest and most flood-prone countries in the world, focusing on household and community vulnerability and adaptive coping mechanisms. Based upon the steadily growing amount of literature in this field we develop and test our own analytical model. In a large-scale household survey carried out in southeast Bangladesh, we ask almost 700 floodplain residents living without any flood protection along the River Meghna about their flood risk exposure, flood problems, flood damage, and coping mechanisms. Novel in our study is the explicit testing of the effectiveness of adaptive coping strategies to reduce flood damage costs. We show that, households with lower income and less access to productive natural assets face higher exposure to risk of flooding. Disparity in income and asset distribution at community level furthermore tends to be higher at higher risk exposure levels, implying that individually vulnerable households are also collectively more vulnerable. Regarding the identification of coping mechanisms to deal with flood events, we look at both the ex ante household level preparedness for flood events and the ex post availability of community-level support and disaster relief. We find somewhat paradoxically that the people that face the highest risk of flooding are the least well prepared, both in terms of household-level ex ante preparedness and community-level ex post flood relief.     

Household‐Level Coastal Adaptation and Its Drivers: A Systematic Case Study Review

Evidence‐based information on household‐level adaptation is an important element of integrated management of vulnerable coastal regions. A growing number of empirical studies deal with household‐level adaptation at the coast in different regions. This article provides a systematic review of these studies. We analyze studies according to how households in different parts of the world are currently adapting, or how they are intending to adapt, and identify explanatory factors for adaptation behavior and intention. We find that households implement a broad range of adaptation measures and that adaptation behavior is explained by individual factors such as socioeconomic and cognitive variables, experience, and perceived responsibilities. Nonpersonal characteristics have also been used to explain adaptation behavior and intention but have not been extensively investigated. Few studies employ qualitative research methods and use inductive approaches as well as models stemming from behavioral economics. Our findings suggest that coastal risk management policies should communicate the efficacy of household‐level adaptation, in addition to information about flood risk, in order to encourage coastal households in their adaptation activities. In this context, we discuss the role of resources and responsibility of households for their adaptation behavior. We describe the lessons learnt and formulate a research agenda on household‐level adaptation to coastal flood risk. In practice, coastal risk management policies should further promote individually driven adaptation by integrating it in adaptation strategies and processes.     

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.     

The Impact of Dietary Changes Among the Inuit of Nunavik (Canada): A Socioeconomic Assessment of Possible Public Health Recommendations Dealing with Food Contamination

Inuit populations meet a large portion of their food needs by eating country food in which pollutants are concentrated. Despite the fact that they contain pollutants, the consumption of country food has many health, social, economic, and cultural benefits. A risk determination process was set up in order to help regional health authorities of Nunavik to deal with this particular issue. Based on Nunavik health authorities' objectives to encourage the region's inhabitants to change their dietary habits, and on both the risks and the benefits of eating country food, several management options were developed. The options aimed at reducing exposure to contaminants by either substituting certain foods with others that have a lower contaminant content or by store-bought foods. This article aims at assessing the potential economic impact of these risk management options before being implemented. Relevant economic data (aggregate income and monetary outlays for the purchase of food and equipment required for food production by households) were collected and identified to serve as a backdrop for the various replacement scenarios. Results show that household budgets, and the regional economy, are not significantly affected by the replacement of contaminated foods with the purchase of store-bought meat, and even less so if the solution involves replacing contaminated foods with other types of game hunted in the region. When financial support is provided by the state, the households can even gain some monetary benefits. Results show that public health authorities' recommended changes to dietary habits among the Inuit of Nunavik would not necessarily involve economic constraints for Inuit households.     

Culture, Cosmopolitanism, and Risk Management

Most cultural approaches to risk management deal with the connections between the forms of social relations within groups and the risk concerns of those groups. According to these theories, a certain limited set of different relational forms (usually three, four, or five) lead to specific, different and conflicting, risk concerns. In contrast to these theories, cosmopolitanism is an approach to culture that focuses, not on forms of sociality, but on changes among forms—expansions and contractions in the inclusivity of forms and movement by persons from one form of sociality to another. Relative to other cultural theories, cosmopolitanism thus is much more concerned with the solution of risk management problems than with their origins. Cosmopolitanism can be thought of as a cultural continuum, with cosmopolitanism at one end and pluralism at the other. Cosmopolitan persons are more open to cultural change—and thus the solution of risk management problems. In this article, we outline our new theory of cosmopolitanism, describe a method for measuring it and present an experimental study that tests some implications of the theory. Results from the study support the theory by showing that, compared to pluralistic respondents, cosmopolitan respondents are more inclusive in their risk management judgments—that is, they express equal concern for a local and a national issue, whereas the pluralistic respondents express greater concern in the local case. We discuss the risk management implications of a cosmopolitan approach to culture.