Risk appetite

How risk tolerant are we as a society these days? I went to an interesting panel discussion today.

We live in a less risky society than we have in pretty much any time in history. The risk of dying prematurely, of being severely injured, of having some catastrophic event make you lose your access to food and shelter, of not having access to adequate healthcare are much lower than they have ever been. The decisions we make as a society about the role of government have much to do with that reduction in risk – so that marginal people in our society can still mostly make that statement.

But my belief is that this drastic reduction in risk has made us, in turn, much more risk averse. When I was growing up, one of the neighbourhood kids was killed, riding his bike on a reasonably busy road. He was seven. His parents, in letting him ride his bike on that road at that age, were doing what most parents at the time would have done. His death was, of course, seen as a tragedy, but not one that involve reckless risk taking.

Now, when seven year olds are much less likely to die than they were in my childhood (1) we are also much less willing to take any risk. So I don’t know of any seven year olds who would ride their bike on any road. Not many would be allowed to walk to school by themselves, crossing moderately busy roads (as I did). The risk of harm to those seven year olds has not gone up in that time – it has gone down – partly because of our increased risk aversion (and hence avoidance of risk), but also because the world itself has become safer, with fewer car accidents, safer houses, more urban living, and better healthcare.

But we are even less willing to expose ourselves to the smaller residual risk that remains. I don’t necessarily think that’s a bad thing, just one that few people recognise in themselves, instead thinking that the increased precautions we take against risk are caused by increases in risk in the society we live in.


(1) The probablility of a seven year old girl dying in the next year is ony 24% of what it was 40 years ago (source ABS)

  4 comments for “Risk appetite

  1. February 22, 2008 at 9:56 am

    Your posting is going through a bit of a purple patch! Have you encountered Frank Furedi’s books on this? Though he does have a bit of a “so we should all trust scientists” sub-text.

  2. February 22, 2008 at 10:15 am

    I find the whole risk thing interesting. I think people are far too precious about what they expose their kids to these days (perhaps because of smaller family size, later parentage?)

    I would much rather have been born in our generation, where we walked to school, were allowed to roam around the suburbs till 6 pm, no questions asked, ride on roads etc (tho Lucas Webb, aged 8, did get killed, riding into oncoming traffic).

  3. February 22, 2008 at 10:05 pm

    Yeeessss….. but…. my source on this is a bit wobbly. A friend of mine works in transport policy, and she says (not that I don’t believe her – it’s just that I can’t give you a link to back this story up) that you need to have a certain proportion of kids walking and riding to school before drivers are aware of them. It’s an amazingly high figure, something like 60% or 70% of all kids. But below that, drivers just aren’t aware that there will be kids around on the roads between say 8am and 9am, and 3pm and 5pm. They aren’t tuned in to them, and they just don’t see them, so the risk to kids who are on bikes, or just trying to cross roads, is a lot higher.

    I’m just not so keen on letting my kids be say, the 45th percentile.

    I walked and biked to school from when I was six years old. There’s no way I would let my six year old daughters walk to school by themselves. My nine year old is a different matter, but she only gets to do so because there’s a controlled crossing she can use to get across the four lane road between us and the school. Even then, many drivers seem to just not ‘see’ the red light, and in the seven short weeks that we have been living here, I have seen about five drivers just go straight through the red light.

  4. February 29, 2008 at 4:07 pm

    The general increase in risk-aversive behaviour has strong implications for electoral politicking as well: it’s much easier to use FUD1 rhetoric effectively with a risk-averse population.

    1. Fear, Uncertainty and Doubt

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