Authors

W. Kip Viscusi

Document Type

Article

Publication Title

The American Economic Review

Publication Date

1990

Page Number

251

Keywords

risk, environmental risk, environmental policy

Disciplines

Environmental Law | Law

Abstract

Society has until recently devoted insufficient attention to the long-run environmental problems that we face, including acid rain and the greenhouse effect. Our inaction with respect to these risks can hardly be characterized as a rational response or an overreaction to risk. There are three possible explanations of such diverse phenomena. First, one could simply dismiss this behavior as being the result of inconsistent and irrational behavior. Second, one could devise ad hoc explanations of why individuals underreact in some instances and overreact in others. A third possibility is to reconcile this seemingly inconsistent behavior with a consistent theoretical framework. In this paper,I follow the third approach in which I discuss new results that indicate how the character of individual risk perceptions can generate inconsistent patterns of response.

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