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Individuals' Estimates of the Risks of Death: Part II--New Evidence

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  • Benjamin, Daniel K
  • Dougan, William R
  • Buschena, David

Abstract

Using new survey data, we test the hypothesis that individuals' perceptions of health and safety risks are unbiased. While we find that respondents' estimates of those risks are sensitive to the information they are given to anchor their responses, we find no evidence to support the widely held view that people tend to underestimate the frequency of relatively common risks. The slight tendency for respondents to overestimate the frequency of extremely unlikely events can plausibly be interpreted as truncation bias. Overall, the accuracy of our subjects' estimates varies in a manner that is fully consistent with simple conjectures about the health and safety information that is of greatest relevance to them in the conduct of their lives. The marked difference between the results of our survey and those of previous studies appears to be attributable to the practical implications of costly information and the common failure of investigators to account for the fact that rational individuals will choose to acquire less than full information about many uncertain events. Copyright 2001 by Kluwer Academic Publishers

Suggested Citation

  • Benjamin, Daniel K & Dougan, William R & Buschena, David, 2001. "Individuals' Estimates of the Risks of Death: Part II--New Evidence," Journal of Risk and Uncertainty, Springer, vol. 22(1), pages 35-57, January.
  • Handle: RePEc:kap:jrisku:v:22:y:2001:i:1:p:35-57
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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. 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.
    6. Kochi, Ikuho & Taylor, Laura O., 2011. "Risk Heterogeneity and the Value of Reducing Fatal Risks: Further Market-Based Evidence," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 2(03), pages 1-28, August.
    7. Lindberg, Gunnar, 2005. "Accidents," Research in Transportation Economics, Elsevier, vol. 14(1), pages 155-183, January.
    8. David Merrell & Kevin M. Simmons & Daniel Sutter, 2005. "The Determinants of Tornado Casualties and the Benefits of Tornado Shelters," Land Economics, University of Wisconsin Press, vol. 81(1).
    9. 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).
    10. 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.
    11. Olivier Armantier & Nicolas Treich, 2006. "Overbidding in Independant Private-Values Auctions and Misperception of Probabilities," CIRANO Working Papers 2006s-15, CIRANO.
    12. 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).
    13. 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).

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