Mortality Risk Perceptions: A Bayesian Reassessment

"This study uses data on perceived and actual mortality risks to test several alternative Bayesian models of the factors influencing risk beliefs. The analysis...indicates that while the hazard rate for the individual age group is an influential factor, the overall population death rate and the discounted expected number of life years lost due to the cause of death are also influential in affecting risk perceptions.... The predictive power of a linear perception model increases with the level of the risk and is least accurate for very small risks."     

Work and Non-Pathological Gambling

Most economists believe that people would value an additional $1,000 in income more if they were poor than if rich, but if so, people should not gamble according to standard expected utility theory. Thus, economists have been challenged to explain the pervasiveness of gambling in human behavior. A recently proposed solution to this theoretical challenge (Nyman 2004; Nyman et al. in Journal of Socio-Economics 37:2492–2504, 2008) suggests that, because having to work for one’s income is a fact of life in market economies, many individuals view the winnings from gambling not only as additional income, but as additional income for which one does not need to work. As a result, individuals, and especially those who are disadvantaged in the labor market, attach a utility premium to gambling winnings and gamble because of that. This utility premium would explain the pervasiveness of gambling in society, especially among the economically disadvantaged. This paper reviews the economic approaches to explaining non-pathological gambling, presents an overview of the new theory, and uses data from the National Epidemiological Survey of Alcohol and Related Conditions from 2001 to test it. The results indicate that the respondent’s work characteristics explain the decision to gamble in a way that is consistent with theory.     

Dead Reckoning: Demographic Determinants of the Accuracy of Mortality Risk Perceptions

General patterns of bias in risk beliefs are well established in the literature, but much less is known about how these biases vary across the population. Using a sample of almost 500 people, the regression analysis in this article yields results consistent with the well-established pattern that small risks are overassessed and large risks are underassessed. The accuracy of these risk beliefs varies across demographic factors, as does the switch point at which people go from underassessment to overassessment, which we found to be 1500 deaths annually for the full sample. Better educated people have more accurate risk beliefs, and there are important differences in the risk perception by race and gender that also may be of policy interest.     

Stringency of Workplace Air Contaminant Exposure Limits: A Case Study of OSHA Risk Management

Political context may play a large role in influencing the efficiency of environmental and health regulations. This case study uses data from a 1989 update of the Occupational Safety and Health Administration (OSHA) Permissible Exposure Limits (PELs) program to determine the relative effects of legislative mandates, costly acquisition of information by the agency, and pressure applied by special interest groups upon exposure standards. The empirical analysis suggests that federal agencies successfully thwart legislative attempts to limit agency discretion, and that agencies exercise bounded rationality by placing greater emphasis on more easily obtained information. The 1989 PELs were less significantly related to more costly information, contained safety factors for chemicals presenting relatively more ambiguous risks, and the proposed standard stringencies showed evidence of being influenced by vying industry and labor interests.