Theory on Risk

Another interesting insight from Freakonomics.

According to Peter Sandman, mathematically, the risk equation can be written as follows:

Risk = Hazard + Outrage

Unfortunately, hazard and outrage do not carry equal weight in the risk equation. When hazard is high and outrage is low, people underreact. But when hazard is low and outrage is high, they overreact. In other words, risk that you can control is much less a source of outrage than the risk you cannot control.

An example is that though many more children die from drowning in a swimming pool than from a gun shot. Most parents in the States forbid their children from going to a family with a gun but not one with a swimming pool.

So why is a swimming pool less frightening than a gun? The thought of a child being shot through the chest with a gun is gruesome, dramatic, horrifying - in a word, outrageous. Swiming pools do not inspire outrage. This is due in part to the familiarity factor. But it takes only about thirty seconds for a child to drown, and it often happens noiselessly. The steps to prevent drowning meanwhile, are pretty straightforward: a watchful adult, a fence around the pool, a locked back door so a toddler doesn't slip outside unnoticed.