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Individuals' Estimates of the Risks of Death: Part I--A Reassessment of the Previous Evidence

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  • Benjamin, Daniel K
  • Dougan, William R

Abstract

It is widely argued that individuals have biased perceptions of health and safety risks. A reconsideration of the best-known evidence suggests that this view is the erroneous result of a failure to consider the implications of scarce information. Our findings imply that the hypothesis that people make unbiased estimates of hazard rates fails to be rejected by the very data that were initially used to reject it. Thus, we are able to reconcile the alleged existence of widespread bias in risk perception with other findings that such bias is less apparent in the case of job-related hazards. The seeming bias in estimating population-average death rates and the lack of such bias in assessing job risks are two manifestations of the same behavior, which is the optimal acquisition of costly information. Copyright 1997 by Kluwer Academic Publishers

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  • Benjamin, Daniel K & Dougan, William R, 1997. "Individuals' Estimates of the Risks of Death: Part I--A Reassessment of the Previous Evidence," Journal of Risk and Uncertainty, Springer, vol. 15(2), pages 115-133, November.
  • Handle: RePEc:kap:jrisku:v:15:y:1997:i:2:p:115-33
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    Citations

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    Cited by:

    1. Henrik Andersson & Petter Lundborg, 2007. "Perception of own death risk," Journal of Risk and Uncertainty, Springer, vol. 34(1), pages 67-84, February.
    2. Olivier Armantier, 2006. "Estimates of Own Lethal Risks and Anchoring Effects," Journal of Risk and Uncertainty, Springer, vol. 32(1), pages 37-56, January.
    3. John C. Moorehouse, 2001. "Does Information on the Internet Weaken the Case for Consumer Protection Regulation?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 16(Spring 20), pages 138-160.
    4. Winslott Hiselius, Lena, 2003. "The Value of Road and Railway Safety - an Overview," Working Papers 2003:13, Lund University, Department of Economics.
    5. Arianne de Blaeij & Daniel van Vuuren, 2001. "Risk Perception of Traffic Participants," Tinbergen Institute Discussion Papers 01-027/3, Tinbergen Institute.
    6. Meglena JELEVA, 2005. "Croyances de survie et choix de contrat d’assurance décès : une étude empirique," Discussion Papers (REL - Recherches Economiques de Louvain) 2005014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters,in: A Handbook of Transport Economics, chapter 17 Edward Elgar Publishing.
    8. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, March.
    9. Thomas Post & Katja Hanewald, 2010. "Stochastic Mortality, Subjective Survival Expectations, and Individual Saving Behavior," SFB 649 Discussion Papers SFB649DP2010-040, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    10. Daniel K. Benjamin, 2010. "Armen Alchian on Evolution, Information, and Cost: The Surprising Implications of Scarcity," Chapters,in: The Elgar Companion to the Chicago School of Economics, chapter 14 Edward Elgar Publishing.
    11. Meglena Jeleva, 2005. "Croyances de survie et choix de contrat d'assurance décès une étude empirique," Recherches économiques de Louvain, De Boeck Université, vol. 71(1), pages 95-116.
    12. G. Dionne & P.-C. Michaud, 2002. "Statistical Analysis of Value-of Life estimates using Hedonic Wage Method," THEMA Working Papers 2002-13, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    13. Andersson, Henrik, 2008. "Perception of Own Death Risk: A Reassessment of Road-Traffic Mortality Risk," Working Papers 2008:11, Swedish National Road & Transport Research Institute (VTI).
    14. 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.
    15. Andersson, Henrik, 2006. "Willingness to Pay for Road Safety and Estimates of the Risk of Death: Evidence from a Swedish Contingent Valuation Study," Working Papers 2006:5, Swedish National Road & Transport Research Institute (VTI).
    16. Andersson, Henrik & Lundborg, Petter, 2006. "Perception of Own Death Risk: An Analysis of Road-Traffic and Overall Mortality Risks," Working Papers 2006:1, Swedish National Road & Transport Research Institute (VTI).
    17. Schubert, Manuel & Brück, Tilman, 2014. "The Perception of Lethal Risks: Evidence from a Laboratory Experiment," IZA Discussion Papers 8578, Institute for the Study of Labor (IZA).

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