Consequences of perceived risk: Demand for mitigation

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Abstract
This paper reports an investigation of demand for risk reduction, or risk intolerance. It has often been assumed that risk level is a good, almost self-evident, predictor of demand for risk reduction. However, few previous studies have addressed the issue explicitly. Two empirical studies are reported here. The first is concerned with a mixture of trivial, everyday risks and potentially fatal risks of the kind usually investigated in risk perception work. It was found that some trivial risks were rated to be just as high or higher than fatal risks, e.g. the risk of catching cold compared with the risk of getting AIDS. The level of perceived risk was found to be related mostly to the probability of harm or injury but demand for risk reduction was related mostly to the expected severity of 'consequences', should harm occur. In a study of home insurance customers, these findings were replicated. It is concluded that demand for risk reduction is driven by the severity of consequences, not probability of harm, or risk. The same is true for attitudes to insurance and protective action.

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