Thinking and Deciding

504 RISK
and whether the acceptable level of the risk was higher or lower than its current level
(and by what ratio); “acceptable” was defined as the point where further reductions
in the risk would not be worth their cost. They were asked other questions about risk
characteristics: voluntariness, immediacy of effect, knowledge that we have about
the risk, controllability, newness, chronic versus catastrophic, common-dread, and
severity of consequences. Each characteristic was described briefly. For example,
chronic-catastrophic was described as, “Is this a risk that kills people one at a time
(chronic risk) or a risk that kills large numbers of people at once (catastrophic risk)?”
and common-dread was described as “Is this a risk that people have learned to live
with and can think about reasonably calmly, or is one that people have great dread for
— on the level of a gut reaction?” Each answer was on a 7-point scale, for example,
from “risk assumed voluntarily” to “ risk assumed involuntarily.”
The answers to some of these questions correlated with each other across the
risks. For example, risks that were rated as being unknown were also rated as being
new, and the same risks tended to be rated as involuntary. Risks that were rated as
“dread” also tended to be rated as “catastrophic.” These correlations were analyzed
into factors. The idea of factor analysis is this: When a group of items correlate
highly with each other, it is because they are all affected by the same underlying
characteristic. This characteristic may be something like a sort of feeling or intuition
about the risks in question. It need not correspond to any question that was asked.
Factor analysis applies this assumption to a set of correlations (every question with
every other question) and, making various assumptions, reports what the underlying
characteristics, the factors, might be. Each factor is described in terms of its
correlations with the original questions.
There were two main factors. Factor 1 was correlated highly with — and thus explained
the correlations among — unknown, new, involuntary, and delayed. Factor 2
was correlated highly with severity of consequences (certainty of being fatal), dread,
and catastrophic. Risks judged high on Factor 1 were food coloring, food preservatives,
pesticides, spray cans, and nuclear power. (Recall, these studies were done in
the U.S. in the early 1980s.) Low items were hunting, motorcycles, fire fighting, and
mountain climbing. Risks high on Factor 2 were commercial aviation and nuclear
power. Low items were power mowers and home appliances.
Factor 2 correlated most highly with the items concerning need for greater regulation.
Factor 1 correlated with these items in one study that used more risk items.
Many of the extra items were chemicals that were judged to be both unknown and
needing more regulation. Need for more regulation did not correlate with the actual
magnitude of the risk. The single item that the subjects (except for the experts)
thought needed the most additional regulation was nuclear power.
Voluntary versus involuntary
We spend a lot more money reducing involuntary risks than voluntary ones. We make
laws to reduce the level of smoke in the air, but we do not ban cigarettes. Several
studies have examined the economic benefits and risks of activities and have calcu-