# Why do we take unnecessary risks?

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Watching the news, 40% of Galveston residents chose not to evacuate in advance of a storm that was rated, on an intensity energy scale, as 30% more powerful that Hurricane Katrina. The National Hurricane Center issued in its warning the very clear words “certain death”.

Yet 40% of residents stayed.

Why?

Ultimately, this points to an inability by people to assess risk correctly. This isn’t limited to storm chasing – it pervades all aspects of our society’s decision-making, which is why we have so many troubling problems today, from the mortgage crisis to quagmire wars.

Why can’t we assess risk effectively?

Part of it is education, and part of it is confusing risk and uncertainty. As I’ve mentioned before, risk is a mathematical expression of probability. There’s a 40% chance of rain today. There’s a 6.8% interest rate on this student loan (because interest rates represent a blend of profit-making and risk-taking).

Uncertainty is a lack of information. You can’t put math on something you don’t know.

As hurricanes approach land, uncertainty fades away and risk becomes quantifiable. Computer models for Hurricanes Ike and Gustav get reliable about 3 days out; at 5 days out, they’re still shaky. There’s still more uncertainty than risk. Once they’re 3 days out, we can assess the risk of a hurricane making landfall with greater certainty, as we did with Katrina, Rita, Gustav, and Ike.

When people make decisions based on uncertainty rather than risk, they tend to choose behavior that is more reckless than a situation would warrant. For example, 40% of Galveston residents chose to stay. Given the uncertainty of the storm’s actual damage potential, they opted to gamble that it wouldn’t be as bad as NHC made it out to be.

When you face risk, you know what your risk tolerance is. There’s a small but non-zero chance you could die every day. You opt to take the risk of getting up in the morning and going about your affairs because the statistical likelihood of you dying is relatively small.

If you face a situation that is uncertain rather than risky, opt for caution rather than recklessness. You may be right, but if you don’t have information that can quantify your risk with a relatively small amount of uncertainty, you’re more likely to benefit from caution.

And for heaven’s sake, when the NHC says certain death – words they don’t use lightly – please believe them and run like hell.

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## Comments

### 8 responses to “Why do we take unnecessary risks?”

1. Two things that leave me scratching my head during hurricanes
1) Locals refusing to evacuate when local authorities telling them that staying means “certain death.”
2) Why news/weathercasters insist on standing *outside* in certain-death and dangerous conditions, just to tell us that it's dangerous and not to go outside.

2. Two things that leave me scratching my head during hurricanes
1) Locals refusing to evacuate when local authorities telling them that staying means “certain death.”
2) Why news/weathercasters insist on standing *outside* in certain-death and dangerous conditions, just to tell us that it's dangerous and not to go outside.

3. It's that sense that so many people have that they are invincible, the “it can't happen to me”, that boggles my mind. I

Yesterday, my husband and I were discussing the “rationale” behind staying. He made an excellent point – people are so attached to their belongings that they are afraid to leave and come back to nothing. I agree, the prospect of leaving my home and coming back to a pile of rubble is heart-wrenching – but not so heart wrenching that I'd be willing to put my family's lives at risk to try and “protect” my stuff. It's just stuff, things, belongings. Stuff can be replaced. Lives cannot.

If people were less attached to their material lives, perhaps they would think twice before throwing their 6 month old baby in the path of a hurricane.

4. Predictably Irrational is a great book that looks at some of this- one of the best books around.
The problem is we always feel it will happen to someone else, it can't be that bad….we get ourselves boxed into a corner like a gambler who is down at Vegas, but is absolutely sure he can “win all that back” and more, only to sink deeper and deeper into a hole.

Unless, or course, you have had that experience before, or someone very close to you has. Then, you “know” the danger and the risk becomes more emotionally real to you.

For people who are faithful, they often think their faith will protect them. That God will save them. It is impossible for them to factor in that storms and damage and pain and death may have a randomness factor, and you are at risk , too. For example, It may not be “my time” to go, but if it's the pilot's time, and I am on that plane, I get caught up in the devastation, all the same.

The bottom line is that avoiding trouble requires adequate risk assessment, and a tolerance of risk. If things get bad, and I could be seriously hurt or die, is that okay with me? If the answer is yes, stay put. If the answer is no, evacuate.

But rarely do we act logically; rarely do we put things in that black and white viewpoint- What's the worst thing that could happen if I evacuate? What's the worst thing that could happen if I stay? Balance those two , and you get a reasonable course of action.

5. It's that sense that so many people have that they are invincible, the “it can't happen to me”, that boggles my mind. I

Yesterday, my husband and I were discussing the “rationale” behind staying. He made an excellent point – people are so attached to their belongings that they are afraid to leave and come back to nothing. I agree, the prospect of leaving my home and coming back to a pile of rubble is heart-wrenching – but not so heart wrenching that I'd be willing to put my family's lives at risk to try and “protect” my stuff. It's just stuff, things, belongings. Stuff can be replaced. Lives cannot.

If people were less attached to their material lives, perhaps they would think twice before throwing their 6 month old baby in the path of a hurricane.

6. It's that sense that so many people have that they are invincible, the “it can't happen to me”, that boggles my mind. I

Yesterday, my husband and I were discussing the “rationale” behind staying. He made an excellent point – people are so attached to their belongings that they are afraid to leave and come back to nothing. I agree, the prospect of leaving my home and coming back to a pile of rubble is heart-wrenching – but not so heart wrenching that I'd be willing to put my family's lives at risk to try and “protect” my stuff. It's just stuff, things, belongings. Stuff can be replaced. Lives cannot.

If people were less attached to their material lives, perhaps they would think twice before throwing their 6 month old baby in the path of a hurricane.

7. Predictably Irrational is a great book that looks at some of this- one of the best books around.
The problem is we always feel it will happen to someone else, it can't be that bad….we get ourselves boxed into a corner like a gambler who is down at Vegas, but is absolutely sure he can “win all that back” and more, only to sink deeper and deeper into a hole.

Unless, or course, you have had that experience before, or someone very close to you has. Then, you “know” the danger and the risk becomes more emotionally real to you.

For people who are faithful, they often think their faith will protect them. That God will save them. It is impossible for them to factor in that storms and damage and pain and death may have a randomness factor, and you are at risk , too. For example, It may not be “my time” to go, but if it's the pilot's time, and I am on that plane, I get caught up in the devastation, all the same.

The bottom line is that avoiding trouble requires adequate risk assessment, and a tolerance of risk. If things get bad, and I could be seriously hurt or die, is that okay with me? If the answer is yes, stay put. If the answer is no, evacuate.

But rarely do we act logically; rarely do we put things in that black and white viewpoint- What's the worst thing that could happen if I evacuate? What's the worst thing that could happen if I stay? Balance those two , and you get a reasonable course of action.

8. Predictably Irrational is a great book that looks at some of this- one of the best books around.
The problem is we always feel it will happen to someone else, it can't be that bad….we get ourselves boxed into a corner like a gambler who is down at Vegas, but is absolutely sure he can “win all that back” and more, only to sink deeper and deeper into a hole.

Unless, or course, you have had that experience before, or someone very close to you has. Then, you “know” the danger and the risk becomes more emotionally real to you.

For people who are faithful, they often think their faith will protect them. That God will save them. It is impossible for them to factor in that storms and damage and pain and death may have a randomness factor, and you are at risk , too. For example, It may not be “my time” to go, but if it's the pilot's time, and I am on that plane, I get caught up in the devastation, all the same.

The bottom line is that avoiding trouble requires adequate risk assessment, and a tolerance of risk. If things get bad, and I could be seriously hurt or die, is that okay with me? If the answer is yes, stay put. If the answer is no, evacuate.

But rarely do we act logically; rarely do we put things in that black and white viewpoint- What's the worst thing that could happen if I evacuate? What's the worst thing that could happen if I stay? Balance those two , and you get a reasonable course of action.

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