True and perceived risks People often overestimate frequency and seriousness of sensational causes of death and underestimate risks from familiar causes Elimination of all risk is impossible An on-going dilemma is Should the government spend the most money on areas with the greatest impact or areas where the most people are upset?
True and Perceived Risks • People often overestimate overestimate frequency and seriousness of sensational causes of death, and underestimate underestimate risks from familiar causes. • Elimination of all risk is impossible impossible. • An on-going dilemma dilemma is: Should the government spend the most money on areas with the greatest impact greatest impact, or areas where the most people are upset ?
True and perceived risks Ultimate Question What degree of risk is acceptable Negligible Risk -Point of no significant health or environmental risk Public generally perceives involuntary risks as greater than voluntary risks and newer technologies as greater risks than more familiar technologies
True and Perceived Risks • Ultimate Question: – What degree of risk is acceptable acceptable ? Negligible Risk Negligible Risk – Point of no significant health or environmental risk. Public generally perceives involuntary involuntary risks as greater than voluntary risks voluntary risks, and newer technologies newer technologies as greater risks than more familiar technologies familiar technologies
Risks of death Deaths per million hours of exposure) Mountain Climbing 40,000 Cigarette Smoking 3,000 Swimming 2,560 Air Travel 500 Struck by Lightning 100 Living near nuclear power plant 0.5
Risks of Death (Deaths per million hours of exposure) – Mountain Climbing Mountain Climbing 40,000 – Cigarette Smoking Cigarette Smoking 3,000 – Swimming Swimming 2,560 – Air Travel Air Travel 500 – Struck by Lightning Struck by Lightning 100 – Living near nuclear power plant Living near nuclear power plant 0.5 – Mountain Climbing – Cigarette Smoking – Swimming – Air Travel – Struck by Lightning – Living near nuclear power plant
“High”一 Perception n“ Medium” of risk Professiona|每 regulators and the public LOW do not always 5 agree on what risks u =03 are
Perception of Risk: Professional regulators and the public do not always agree on what risks are
Economics and the Environment Environmental problems are primarily economic problems Economics deals with resource allocation Economic Concepts Economic good/service is anything defined as scarce Resource is anything that contributes to making desired goods and services available Supply is the amount of the good/ service available for purchase/consumption
Economics and the Environment • Environmental problems are primarily economic problems. – Economics deals with resource allocation resource allocation. • Economic Concepts – Economic good/service is anything defined as scarce. Resource is anything that contributes to making desired goods and services desired goods and services available. – Supply is the amount of the good/service available available for purchase/consumption