Flawed risk assessment and policy decisions
Humans are bad at assessing risk even in the best of times. During a pandemic – when the disease is unfamiliar, people are isolated and stressed, and the death toll is rising – our risk perception becomes even more distorted. This is a recipe for disastrous policy mistakes.
In a new column, Kaushik Basu, C. Marks Professor at Cornell University and former Chief Economist and Senior Vice President of the World Bank, explains how saliency can distort the perception of statistical risk. Awareness of this bias is important for individual decisions, when we balance the probability of receiving and transmitting the contagion agaist the personal cost of taking precautions, but even more important for policymakers who balance the probability of an outbreak against the costs to people's wellbeing and livelihoods.
Link to the article here.
Posted by Maria Perrotta Berlin,