Estimation of risk is a very desirable quality to have because it can improve survival rates. Earlier, we have seen the definition of risk as the product of probability and impact. But for most people, it is something far more intuitive and personal. Risk perception, as they are called, may come from recent experiences, news headlines or simply from the lack of knowledge of something. One dominant example is the perception that people live more risky life today than in the past. Data suggest this is incorrect.
Incorrect estimation of risk comes from our mind’s inability to quantify probabilities. That is why when asked about the risk of an even, experts looks at the past (annual incident rate), whereas people consider the future (catastrophic potential). An example is how laypeople perceive the risk due to nuclear power (very high) versus what the experts’ estimate (one of the safest energy technologies)! Wikipedia reports about 30 incidents related to radiations in history, and the deaths were in single digits in 21 of them. Now compare that with a million annually due to coal!
Slovic, Perception of Risk
List of nuclear and radiation accidents
Health and environmental impact of the coal industry
