Risk–Risk Analysis

W. Kip Viscusi

in Rational Risk Policy

Published in print March 1998 | ISBN: 9780198293637
Published online November 2003 | e-ISBN: 9780191596995 | DOI:
 Risk–Risk Analysis

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Regulatory policies create a variety of risk–risk trade‐offs. People may engage in more risk‐taking behaviour in response to regulations that reduce the risks of their behaviour, as seatbelt use may encourage drivers to go faster and safety caps may create a ‘lulling effect’ whereby people are lulled into a fall sense of security regarding product risks. Regulations also entail resource expenditures that in effect make society poorer, which will increase risk levels, given the positive linkage between wealth and health. The resulting risk–risk trade‐offs can be linked theoretically to the value of life, implying that expenditures with a cost per life saved of more than ten times the value of life may in fact decrease individual health.

Keywords: health; lulling; regulation; risk‐risk analysis; safety caps; seatbelts; trade‐offs; value of life

Chapter.  4906 words.  Illustrated.

Subjects: Microeconomics

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