possible means of minimizing risk have been identified, it becomes necessary
to make decisions regarding the level of risk to which we are willing
to expose ourselves. Most experts readily agree (at least in theory) that
when risk arises from human or technological activity, it is first important
to evaluate whether the risky activity is necessary, or whether safer
alternatives exist. Unfortunately, the definition of "necessary”
varies depending upon the motivations of the assessor, and insufficient
attention is given to the exploration of plausible alternatives. Risk
assessment has been misused extensively in the past decades, often for
the sake of corporate economic profit.
almost any situation, risk abatement has costs of money, time, or other
inconveniences. We must therefore decide how much risk abatement we are
willing to "buy." We often choose a risk management strategy
by comparing the concepts of "acceptable risk" and "optimal
risk is the risk that individuals or society say is okay. We all tolerate
certain levels of risk in our daily lives. For example, we may ride in
a car without a seatbelt, eat too many cheeseburgers, go skiing twice
a year, or smoke a few cigarettes a day. Each activity is associated with
some risks, but consciously or subconsciously, we accept that risk.
studies have been attempted to determine whether or not society deems
a certain level of risk acceptable. Risk acceptability is determined by
studying an individual's "revealed" or "expressed”
preferences. Revealed preferences are those that are inferred from levels
of risk people have accepted in the past. Expressed preferences are obtained
by asking people directly what levels of risk they find acceptable.
the scale of population risk (as opposed to the individual risks we mentioned
before), government or regulatory agencies will often set levels of acceptable
risk in the form of thresholds below which risk will be tolerated. For
example, the EPA sets drinking water standards limiting the amounts of
contaminants that may be present in the public drinking water supply.
They do this by setting threshold limits for contaminant concentrations
below which the risk presented by these contaminants is considered "acceptable."
Optimal risk is determined by quantitatively assessing the pros and cons
of a risk. Optimal risk "implies a trade-off that minimizes the sum
of all undesirable consequences." The classic economics answer to
the question of optimal risk is that "the optimal level is where
the sum of the cost of risk abatement and the expected losses from risk
is at a minimum."
Optimal risk as determined by minimum sum of cost of risk abatement
and expected losses from risk. (from Morgan, M. Granger. "Choosing
and Managing Technology-Induced Risk," IEEE Spectrum, vol.
18, no. 12, pp. 53-60. December 1981.)
determining optimal risk, assessors attempt to quantify the costs and
benefits of a risky activity. They often quantify and measure in monetary
units. The problem is that they are often assigning monetary values to
things that shouldn't be priced. How does one ethically place a price
on human life, ecological health, quality of life, opportunity, or other
such "costs" and "benefits"?