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Dimensions of Risk Perception for Financial and Health Risks

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  • David R. Holtgrave
  • Elke U. Weber

Abstract

This study of 29 MBA students compares two models of risk perception for both financial and health risk stimuli. The first, inspired by Luce and Weber's Conjoint Expected Risk (CER) model, uses five dimensions: probability of gain, loss and status quo, and expected benefit and harm. The second, inspired by the Sovic et al. psychometric model, employs seven dimensions: voluntariness, dread, control, knowledge, catastrophic potential, novelty, and equity. The CER‐type model provided a better fit for most subjects and stimuli. Adding the psychological risk dimensions from the Slovic et al. model explained only modestly more variance. Relationships between the dimensions of the two models are described and the construction of a hybrid model explored.

Suggested Citation

  • David R. Holtgrave & Elke U. Weber, 1993. "Dimensions of Risk Perception for Financial and Health Risks," Risk Analysis, John Wiley & Sons, vol. 13(5), pages 553-558, October.
    • Handle: RePEc:wly:riskan:v:13:y:1993:i:5:p:553-558
    DOI: 10.1111/j.1539-6924.1993.tb00014.x
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    References listed on IDEAS

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    1. Gerald T. Gardner & Leroy C. Gould, 1989. "Public Perceptions of the Risks and Benefits of Technology," Risk Analysis, John Wiley & Sons, vol. 9(2), pages 225-242, June.
    2. Weber, Elke U. & Bottom, William P., 1990. "An empirical evaluation of the transitivity, monotonicity, accounting, and conjoint axioms for perceived risk," Organizational Behavior and Human Decision Processes, Elsevier, vol. 45(2), pages 253-275, April.
    3. Nancy Nighswonger Kraus & Paul Slovic, 1988. "Taxonomic Analysis of Perceived Risk: Modeling Individual and Group Perceptions Within Homogeneous Hazard Domains," Risk Analysis, John Wiley & Sons, vol. 8(3), pages 435-455, September.
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    Cited by:

    1. Anat Bracha & Elke U. Weber, 2012. "A psychological perspective of financial panic," Public Policy Discussion Paper 12-7, Federal Reserve Bank of Boston.
    2. Atasoy, Özgün & Trudel, Remi & Noseworthy, Theodore J. & Kaufmann, Patrick J., 2022. "Tangibility bias in investment risk judgments," Organizational Behavior and Human Decision Processes, Elsevier, vol. 171(C).
    3. Sudeep Bhatia, 2019. "Predicting Risk Perception: New Insights from Data Science," Management Science, INFORMS, vol. 65(8), pages 3800-3823, August.
    4. Werner Gleißner & Florian Follert & Frank Daumann & Frank Leibbrand, 2021. "EU’s Ordering of COVID-19 Vaccine Doses: Political Decision-Making under Uncertainty," IJERPH, MDPI, vol. 18(4), pages 1-12, February.
    5. Robert N. Bontempo & William P. Bottom & Elke U. Weber, 1997. "Cross‐Cultural Differences in Risk Perception: A Model‐Based Approach," Risk Analysis, John Wiley & Sons, vol. 17(4), pages 479-488, August.
    6. Shoshana Shiloh & Gülbanu Güvenç & Dilek Önkal, 2007. "Cognitive and Emotional Representations of Terror Attacks: A Cross‐Cultural Exploration," Risk Analysis, John Wiley & Sons, vol. 27(2), pages 397-409, April.
    7. Sara M. Constantino & Alicia D. Cooperman & Thiago M. Q. Moreira, 2021. "Voting in a global pandemic: Assessing dueling influences of Covid‐19 on turnout," Social Science Quarterly, Southwestern Social Science Association, vol. 102(5), pages 2210-2235, September.
    8. Lerner, Jennifer & Han, Seunghee & Keltner, Dacher, 2007. "Feelings and Consumer Decision Making: Extending the Appraisal-Tendency Framework," Scholarly Articles 37143006, Harvard Kennedy School of Government.
    9. Frank Daumann & Florian Follert & Werner Gleißner & Endre Kamarás & Chantal Naumann, 2021. "Political Decision Making in the COVID-19 Pandemic: The Case of Germany from the Perspective of Risk Management," IJERPH, MDPI, vol. 19(1), pages 1-23, December.
    10. Florian Follert & Werner Gleißner & Dominik Möst, 2021. "What Can Politics Learn from Management Decisions? A Case Study of Germany’s Exit from Nuclear Energy after Fukushima," Energies, MDPI, vol. 14(13), pages 1-15, June.
    11. Christina G. S. Palmer, 1996. "Risk Perception: An Empirical Study of the Relationship Between Worldview and the Risk Construct," Risk Analysis, John Wiley & Sons, vol. 16(5), pages 717-723, October.
    12. Grant, Kevin & Edgar, David & Sukumar, Arun & Meyer, Martin, 2014. "‘Risky business’: Perceptions of e-business risk by UK small and medium sized enterprises (SMEs)," International Journal of Information Management, Elsevier, vol. 34(2), pages 99-122.
    13. Elke U. Weber & Niklas Siebenmorgen & Martin Weber, 2005. "Communicating Asset Risk: How Name Recognition and the Format of Historic Volatility Information Affect Risk Perception and Investment Decisions," Risk Analysis, John Wiley & Sons, vol. 25(3), pages 597-609, June.
    14. Andersson, Lina, 2022. "Fear and Economic Behavior," Working Papers in Economics 819, University of Gothenburg, Department of Economics.
    15. Tianjun Feng & L. Robin Keller & Liangyan Wang & Yitong Wang, 2010. "Product Quality Risk Perceptions and Decisions: Contaminated Pet Food and Lead‐Painted Toys," Risk Analysis, John Wiley & Sons, vol. 30(10), pages 1572-1589, October.
    16. Gülbanu Kaptan & Shoshana Shiloh & Dilek Önkal, 2013. "Values and Risk Perceptions: A Cross‐Cultural Examination," Risk Analysis, John Wiley & Sons, vol. 33(2), pages 318-332, February.

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