Cancer risk

Risks Estimated to Increase Chance of Death by 0.000001 per Year (Wilson, 1979)

Activity                            Cause of death
--------                            --------------
Smoking 1.4 cigarettes              Cancer, heart disease
Drinking 1/2 liter of wine          Cirrhosis of the liver
Spending 1 hour in a coal mine      Black lung disease
Spending 3 hours in a coal mine     Accident
Living 2 days in New York or Boston Air pollution
Travelling 6 minutes by canoe       Accident
Travelling 10 miles by bicycle      Accident
Travelling 150 miles by car         Accident
Flying 1,000 miles by jet           Accident
Flying 6,000 miles by jet           Cancer caused by cosmic radiation

2012 figures from the National Safety Council

Regulation: The cost of a life year


Mandatory seat-belt-use law                   $69
Influenza vaccination for all citizens       $140
Sickle-cell screening for black newborns     $240
Federal law requiring smoke detectors
 in homes                                    $920
Mandatory motorcycle-helmet laws           $2,000
Pneumonia vaccination for seniors          $2,200
Chlorination of drinking water             $3,100
Smoking-cessation advice for people who
 smoke more than one pack per day          $9,800
Alcohol-safety programs for drunk drivers $21,000
AZT for people with AIDS                  $26,000
Smoke detectors in airplane lavatories    $30,000
Child-resistant cigarette lighters        $42,000


Ban asbestos in pipeline wrap             $65,000
Child-restraint systems in cars           $73,000
Promote voluntary helmet
 use for all-terrain vehicles             $44,000
National 55 mph speed limit               $89,000
Community health-care services
  for women and infants                  $100,000
Widen lanes on rural roads
  from 9 to 11 feet                      $150,000
Pneumonia vaccination for
 children age 2Ä4                        $170,000
Redesign chain saws to reduce
  rotational kickback injuries           $230,000
Ban amitraz pesticide on pears           $350,000
Ozone-control program for
  southern coast of California           $610,000


Warning letters sent to
  problem drivers                        $720,000
Ejection system for the
  Air Force B-58 bomber                $1,200,000
Triple the wind-resistance
  capabilities of new buildings        $2,600,000
Seat belts for school-bus passengers   $2,800,000
Ban asbestos in packing                $5,700,000
Strengthen buildings in
  earthquake-prone areas              $18,000,000
From "Five-Hundred Life-Saving Interventions and Their Cost-Effectiveness," a study conducted by Tammy 0. Tengs, et al., and published in Risk Analysis, Vol. 15, No. 3.

Why? Factor analysis of risks (Slovic)

slovic graph

Factors (Slovic)

slovic factors

Intuitions about risk

Risk expenditures (McDaniels, 1988)

Mean WTP U.S. deaths Implied U.S. Actual or proposed
Hazard in survey per year national WTP expenditures
Workplace chemical $7.95 1 $715 mil. > $11 mil.
Explosives $7.68 2 $345 mil. $3 mil.
Aviation $46.07 40 $103 mil. $680,000
Power tools $15.05 80 $17 mil. $430,000
Automobiles $161.30 10,000 $1.3 mil. $95,000

Individual vs. statistical

"There is a distinction between an individual life and a statistical life. Let a 6-year-old girl with brown hair need thousands of dollars for an operation that will prolong her life until Christmas, and the post office will be swamped with nickels and dimes to save her. But let it be reported that without a sales tax the hospital facilities of Massachusetts will deteriorate and cause a barely perceptible increase in preventable deaths - not many will drop a tear or reach for their checkbooks." (Schelling, 1968)

Zero risk (Baron, Gowda, and Kunreuther)

Two cities have landfills that affect the groundwater in the area. The larger city has 2,000,000 people, and the smaller city has 1,000,000. Leakage from the landfill in the larger city will cause 8 cases of cancer per year. Leakage from the landfill in the smaller city will cause 4 cases of cancer per year. Funds for cleanup are limited. The following options are available:

1. Partially clean up both landfills. The number of cancer cases would be reduced from 8 to 4 cases in the larger city and from 4 to 2 cases in the smaller city.

2 Totally clean up the landfill in the smaller city and partially clean up the landfill in the larger city. The number of cancer cases would be reduced from 8 to 7 cases in the larger city and from 4 to 0 cases in the smaller city.

3. Concentrate on the landfill in the larger city, but partially clean up the landfill in the smaller city. The number of cancer cases would be reduced to from 8 to 3 cases in the larger city and from 4 to 3 cases in the smaller city.

Individual risk and protective behavior

Viscusi et al.: smokers in Spain:

Worry has independent effects (Baron et al.)

Neglect of probability

Seat-belt example

Rottenstreich and Hsee (2001):
$7 (median) to avoid a 1% chance of a shock
$10 to avoid a 99% chance

People don't ask for information

Neglect of probability: Gurmankin Levy and Baron (2005)

badness responses

Intuitive toxicology

35% of the public agreed that, ``For pesticides, it's not how much of the chemical you are exposed to that should worry you, but whether or not you are exposed to it at all.'' Only 4% of the scientists agreed. (Kraus et al.)

20% agreed that, ``If something can cause harm to the body in large amounts, then it is always better not to eat it even in small amounts'' (Rozin et al., 1996).

26% agreed that a diet free of salt is healthier than the same diet with a pinch of salt.

Omission bias and neglect of numbers

A site that opposes vaccination

Emotion and financial risk

investment cycles

Investment risk

People think too short:
* Won't pay x for (3.5x,.33), but they will if they decide on a group of 3 (Gneezy and Potters, 1997).

But they are overconfident starting new businesses (Camerer and Lovallo, 1999):
* Competitive game, chance or skill (puzzles).
* Made more money when chance.
* More confident when skill.

Insurance: Normative theory

Redistribution: declining marginal utility

Insurance: biases

low deductables (and then don't file claims): e.g., people pay $100 to reduce deductable from $1000 to $500, with 5% claim rate (Snydor, 2006)

failure to use subsidy (flood): possibly the result of reducing low probabilities to zero


Vividness (Johnson et al., 1993):
$14.12 for insurance against death from ``any act of terrorism,''
$10.31 for death from ``any non-terrorism related mechanical failure,''
$12.03 for death from ``any reason.''

Tort law

tort law

Biases in tort law

retribution, not deterrence

confusion of compensation and deterrent functions

Biases: Naturalism (Nature is good)

It matters if people cause it.

Subjects in one study were willing to contribute about $19 to an international fund to save Mediterranean dolphins when the dolphins were "threatened by pollution" but only $6 when the dolphins were "threatened by a new virus." (Kahneman et al., 1993; Kahneman and Ritov, 1994).

In another study, subjects thought that compensation for injuries such as infertility should be greater when the injury is caused by a drug rather a natural disease, even if the penalty paid by the drug maker does not affect the amount of compensation paid to the victim (Baron and Ritov, 1993).

Polluter pays

Subjects preferred to have companies clean up their own hazardous waste, even if the waste threatened no one, rather than spend the same amount of money cleaning up the much more dangerous waste of a defunct company (Baron, Gowda, and Kunreuther, 1993).


Beattie and Baron (1995) found that people prefer in-kind penalties over out-of-kind penalties.

For example, if a company caused a fire that destroyed a forest (beach), subjects would rather have the company pay for the planting of a new forest (preservation of a beach) than for preservation of a beach (planting of a new forest). The forest was to be planted anyway.


Own-group bias.

Self-interest illusion: "I am a member of my group. So anything that helps my group helps me. Thus, if I sacrifice for my group, I help myself."

Would cause oppoisition to alternative ways of helping.

Availability cascades (Kuran and Sunstein, 1999)

Global warming may be more "available" than some of the alternative problems, such as overfishing or flu.

Concerns for risk risk and fall in cycles that sometimes have little to do with evidence (Loewenstein \& Mather, 1990).

General policy recommendations

Smart government, trust (Breyer, Sunstein)

Libertarian paternalism (Sunstein and Thaler)



"He who refuses to do arithmetic is doomed to talk nonsense." John McCarthy