Document Type
Article
Publication Title
Journal of Benefit-Cost Analysis
Publication Date
9-2019
ISSN
2194-5888
Page Number
296
Keywords
drinking water, prescription drugs, ambiguity, environmental risks
Disciplines
Environmental Law | Food and Drug Law | Law
Abstract
Uncertain future risks pose cognitive and analytical challenges to household decision makers. Risks with uncertain probabilities, coupled with potentially severe outcomes pose problems for decision-making and are prone to overreactions. Imprecision in risk estimates generates behavioral distortions such as ambiguity aversion. This article presents new empirical results indicating household overvaluations of uncertain threats posed by several drinking water risks: traces of prescription drugs in drinking water, plastic water bottles with bisphenol-A, and the weed killer atrazine in drinking water. Negative reactions reflect responses to ambiguous risks, but policies driven by these concerns may misallocate regulatory resources due to risk conservatism and “no-regrets” responses.
Recommended Citation
W. Kip Viscusi, Joel Huber, and Jason Bell,
Responsible Precautions for Uncertain Environmental Risks, 10 Journal of Benefit-Cost Analysis. 296
(2019)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/1546