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Should policy be co...
Should policy be concerned with objective or subjective risks?
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- Johansson-Stenman, Olof, 1966 (författare)
- Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik, Enheten för miljöekonomi,Department of Economics, Environmental Economics Unit
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(creator_code:org_t)
- Göteborg, 2003
- Engelska.
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Serie: Working Papers in Economics (online), 1403-2465 ; 93
- Relaterad länk:
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https://gup.ub.gu.se...
Abstract
Ämnesord
Stäng
- Much psychological evidence suggests that people's risk-perceptions are biased. This paper assumes that public policy should intrinsically be concerned with people's expected welfare, rather than their preferences, which sometimes implies a degree of paternalism. Still, expected welfare depends on both objective and subjective risks. The latter are important through mental suffering associated with the risk, and through secondbest considerations in decentralized markets where people make their own choices between risky alternatives. Optimality rules for both public provision of risk-reducing investments, and for provision of (costly) information to reduce people's risk-perception bias, are presented.
Ämnesord
- SAMHÄLLSVETENSKAP -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)
- SOCIAL SCIENCES -- Economics and Business -- Economics (hsv//eng)
Nyckelord
- Subjective risk; risk management; risk regulation
- risk-perception;information provision; cost-benefit analysis; paternalism
Publikations- och innehållstyp
- vet (ämneskategori)
- rap (ämneskategori)