The realities of risk-cost-benefit analysis

Fischhoff, Baruch

doi:10.1126/science.aaa6516

Cited by 97 publications

(66 citation statements)

References 74 publications

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“…56 57 It can also help understand different interpretations and judgments about the feasibility, viability or desirability of particular technologies. 58 Such judgments can also involve different interpretations of "systemic risk" -hazards that are complex, uncertain, ambiguous, and which have the potential to reverberate throughout political, social, and economic dimensions. 59 60 For instance, as Table 2 shows 61 , many energy systems alleviate some risks (or achieve social or economic advantages) only by presenting other risks (including social or economic costs).…”

Section: Theme 1: Risk and Emergent Technologymentioning

confidence: 99%

Towards a science of climate and energy choices

2016

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Abstract:The linked problems of energy sustainability and climate change are among the most complex and daunting facing humanity at the start of the 21 st century. This joint special issue of Nature Energy and Nature Climate Change illustrates how understanding and addressing these problems will require an integrated science of coupled human and natural systems, including technological systems but also extending well beyond the domain of engineering or even economics. It shows the value of replacing the stylized assumptions about human behavior that are common in policy analysis with ones based on datadriven science. Drawing from and engaging articles in the special issue, we identify key contributions to understanding non-technological factors connecting economic activity and greenhouse gas emissions, describe a multi-dimensional space of human action on climate and energy issues, and illustrate key themes, dimensions, and contributions to fundamental understanding and to informed decision making with reference to other papers in this collection.

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Section: Theme 1: Risk and Emergent Technologymentioning

confidence: 99%

Towards a science of climate and energy choices

2016

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“…We also have been fortunate enough to find them in collaborations with medical experts, on understanding and informing patients' health decisions (80); with engineers, in analyzing risks (81,82) and promoting sustainable consumer decisions (83,84); with environmental scientists, in understanding public response to extreme weather and climate change (85,86); and with anthropologists and political scientists in studying security issues (87,88). We believe that such collaborations are essential for addressing applied problems and are healthy for the sciences involved, by testing their theories in complex environments and revealing phenomena that stimulate new research.…”

Section: Conditions For Transdisciplinary Researchmentioning

confidence: 99%

Eliciting probabilistic expectations: Collaborations between psychologists and economists

Bruin

Fischhoff

2017

Proc. Natl. Acad. Sci. U.S.A.

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We describe two collaborations in which psychologists and economists provided essential support on foundational projects in major research programs. One project involved eliciting adolescents' expectations regarding significant future life events affecting their psychological and economic development. The second project involved eliciting consumers' expectations regarding inflation, a potentially vital input to their investment, saving, and purchasing decisions. In each project, we sought questions with the precision needed for economic modeling and the simplicity needed for lay respondents. We identify four conditions that, we believe, promoted our ability to sustain these transdisciplinary collaborations and coproduce the research: (i) having a shared research goal, which neither discipline could achieve on its own; (ii) finding common ground in shared methodology, which met each discipline's essential evidentiary conditions, but without insisting on its culturally acquired tastes; (iii) sharing the effort throughout, with common language and sense of ownership; and (iv) gaining mutual benefit from both the research process and its products.One day in 1995, one of us (B.F.) was standing in line at the National Academy of Sciences Refectory, along with Charles Manski, an economist then at the University of Wisconsin (now at Northwestern University). Manski was complaining about restrictions imposed on the survey questions that he was designing for the 1997 National Longitudinal Study of Youth. To understand adolescents' willingness to invest in their human capital, he wanted to ask them to assess their percent chance of experiencing significant life events that could affect their earning power, such as getting a job as a young adult with or without a high school diploma. However, members of the survey design team maintained that young people could not answer probability questions. They therefore insisted on "easier" response scales, asking adolescents to provide verbal quantifiers, such as "unlikely" and "very likely," instead of percentages. Manski worried that these verbal quantifiers were ambiguous and would elicit responses that could not be compared with actual statistics, making it impossible to tell how well adolescents understood their circumstances. Indeed, Manski saw the constraint as triggering a vicious circle. If he had to ask needlessly vague questions, then the predictive value of his models would be undermined, making it harder to keep his questions on the survey in the competition for space with other scientists. OverviewThe ensuing conversation was the start of a collaboration between economists and psychologists coproducing research that neither discipline could have done on its own. After summarizing the scientific foundations for eliciting lay expectations, we describe two major collaborative projects, one focused on adolescents' expectations for significant life events and the other on consumers' expectations for inflation. We conclude by describing the conditions that we believe have made...

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“…Unless the analytical-deliberative process produces a consensus, the distribution of (meta-)preferences that it elicits could be a source of inputs to sensitivity analyses. Fundamentally different ethical principles might still lead to the same choices, as has been found in risk perception studies (e.g., whether risks are incurred involuntarily and have delayed effects) [16, 23, 43]. Of course, sensitivity analyses that reflect variation in the statistic used to summarize preferences are asking a very different question than sensitivity analyses that reflect disagreement about what summary statistic to use in the first place.…”

Section: Resultsmentioning

confidence: 99%

“…Finally, we offer an approach for choosing among these options. Related concerns can be found in assessments of other forms of analysis [14, 15, 16, 17]. Our approach is generalizable to any societal preference-based HRQL measurement system.…”

Section: Introductionmentioning

confidence: 99%

An Approach to Reconciling Competing Ethical Principles in Aggregating Heterogeneous Health Preferences

et al. 2017

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Background Health-related quality of life (HRQL) scores are used extensively to quantify the effectiveness of medical interventions. Societal preference-based HRQL scores aim to produce societal valuations of health by aggregating valuations from individuals in the general population, where each aggregation procedure embodies different ethical principles, as explained in social choice theory. Methods Using the Health Utilities Index as an exemplar, we evaluate societal preference-based HRQL measures in the social choice theory framework. Results We find that current preference aggregation procedures are typically justified in terms of social choice theory. However, by convention, they use only one of many possible aggregation procedures (the mean). Central to the choice of aggregation procedure is how to treat preference heterogeneity, which can affect analyses that rely on HRQL scores, such as cost-effectiveness analyses. We propose an analytical-deliberative framework for choosing one (or a set of) aggregation procedure(s) in a socially credible way, which we believe to be analytically sound and empirically tractable, but leave open the institutional mechanism needed to implement it. Conclusions Socially acceptable decisions about aggregating heterogeneous preferences require eliciting stakeholders’ preferences among the set of analytically sound procedures, representing different ethical principles. We describe a framework for eliciting such preferences for the creation of HRQL scores, informed by social choice theory and behavioral decision research.

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The realities of risk-cost-benefit analysis

Cited by 97 publications

References 74 publications

Towards a science of climate and energy choices

Towards a science of climate and energy choices

Eliciting probabilistic expectations: Collaborations between psychologists and economists

An Approach to Reconciling Competing Ethical Principles in Aggregating Heterogeneous Health Preferences

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