Mad Cows, Terrorism and Junk Food: Should Public Policy Reflect Subjective or Objective Risks?
| Johansson-Stenman, Olof | swe | |
| Department of Economics | swe | |
| 2006-01-25 | swe | |
| 2007-02-09T11:14:53Z | ||
| 2007-02-09T11:14:53Z | ||
| 2006 | swe | |
| Empirical evidence suggests that people’s risk-perceptions are often systematically biased. This paper develops a simple framework to analyse public policy when this is the case. Expected utility (well-being) is shown to depend on both objective and subjective risks. The latter are important because of the mental suffering associated with the risk and as a basis for corrective taxation and second-best adjustments. Optimality rules for public provision of riskreducing investments, “internality-correcting” taxation and provision of (costly information to reduce people’s risk-perception bias are presented. | swe | |
| 37 pages | swe | |
| 172025 bytes | ||
| application/pdf | ||
| 4684 | swe | |
| Göteborg University. School of Business, Economics and Law | swe | |
| 1403-2465 | swe | |
| http://hdl.handle.net/2077/2727 | ||
| en | swe | |
| Working Papers in Economics, nr 194 | swe | |
| Subjective risk | swe | |
| risk management | swe | |
| risk regulation | swe | |
| risk perception bias | swe | |
| terrorism | swe | |
| fat taxes | swe | |
| internalities | swe | |
| cost-benefit analysis | swe | |
| corrective taxation | swe | |
| paternalism | swe | |
| Economics | swe | |
| Mad Cows, Terrorism and Junk Food: Should Public Policy Reflect Subjective or Objective Risks? | swe | |
| Report | swe |
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