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Risk ratings that do not measure probabilities

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Author Info

  • W. Kip Viscusi
  • Jahn Hakes

Abstract

Survey questions regarding assessed survival chances are an often-used example of a risk rating scale for eliciting a probability assessment. The responses to such questions do exhibit several properties of probabilities, but differ in some key respects, resulting in relationships which are not only inconsistent with accurate beliefs, but also in which precision is sacrificed for ease of use. The Health and Retirement Study, for example, uses a 0 to 10 scale to measure self-assessed survival probabilities to a particular age. Transformation of these responses for use as a probability results in some patterns that are consistent with a model of imperfect information, or a monotonic transformation of imperfectly perceived risks, but more subtle analysis reveals inconsistencies with either of these theories, suggesting the scale is inappropriate for use as a probability measure. The age-related effects for female respondents are the most salient results that are inconsistent with use of the survey's response scale as representing a probability.

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File URL: http://hdl.handle.net/10.1080/1366987032000047789
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Risk Research.

Volume (Year): 6 (2003)
Issue (Month): 1 (January)
Pages: 23-43

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Handle: RePEc:taf:jriskr:v:6:y:2003:i:1:p:23-43

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Cited by:
  1. Gabriel Picone & Frank Sloan & Donald Taylor, 2004. "Effects of Risk and Time Preference and Expected Longevity on Demand for Medical Tests," Journal of Risk and Uncertainty, Springer, vol. 28(1), pages 39-53, January.
  2. Ahmed Khwaja & Frank Sloan & Sukyung Chung, 2007. "The relationship between individual expectations and behaviors: Mortality expectations and smoking decisions," Journal of Risk and Uncertainty, Springer, vol. 35(2), pages 179-201, October.
  3. Evans, Mary F. & Smith, V. Kerry, 2006. "Do we really understand the age-VSL relationship?," Resource and Energy Economics, Elsevier, vol. 28(3), pages 242-261, August.
  4. Cerroni, Simone & Notaro, Sandra & Shaw, W. Douglass, 2013. "How many bad apples are in a bunch? An experimental investigation of perceived pesticide residue risks," Food Policy, Elsevier, vol. 41(C), pages 112-123.
  5. Hammar, Henrik & Johansson-Stenman, Olof, 2001. "The Value Of Risk - Free Cigarettes - Do Smokers Underestimate The Risk?," Working Papers in Economics 61, University of Gothenburg, Department of Economics.
  6. John Payne & Namika Sagara & Suzanne Shu & Kirstin Appelt & Eric Johnson, 2013. "Life expectancy as a constructed belief: Evidence of a live-to or die-by framing effect," Journal of Risk and Uncertainty, Springer, vol. 46(1), pages 27-50, February.
  7. Adeline Delavande, 2005. "Measuring Revisions to Subjective Expectations," 2005 Meeting Papers 682, Society for Economic Dynamics.
  8. Fumihiro Yamane & Kyohei Matsushita & Toshio Fujimi & Hideaki Ohgaki & Kota Asano, 2014. "A Simple Way to Elicit Subjective Ambiguity: Application to Low-dose Radiation Exposure in Fukushima," Discussion Papers 1417, Graduate School of Economics, Kobe University.
  9. Frank Sloan & Lindsey Eldred & Tong Guo & Yanzhi Xu, 2013. "Are people overoptimistic about the effects of heavy drinking?," Journal of Risk and Uncertainty, Springer, vol. 47(1), pages 93-127, August.
  10. Ahmed Khwaja & Frank Sloan & Sukyung Chung, 2006. "The Effects of Spousal Health on the Decision to Smoke: Evidence on Consumption Externalities, Altruism and Learning Within the Household," Journal of Risk and Uncertainty, Springer, vol. 32(1), pages 17-35, January.
  11. Gregory DeAngelo & Gary Charness, 2012. "Deterrence, expected cost, uncertainty and voting: Experimental evidence," Journal of Risk and Uncertainty, Springer, vol. 44(1), pages 73-100, February.
  12. Khwaja, Ahmed & Silverman, Dan & Sloan, Frank & Wang, Yang, 2009. "Are mature smokers misinformed?," Journal of Health Economics, Elsevier, vol. 28(2), pages 385-397, March.

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