The Role of Preference and Emotion in Environmental Risk Perception
Charlene Xie1, Yang Liu1, Shengxiang She2, Dixi Song1
1
Shenzhen Graduate School, Harbin Institute of Technology, Shenzhen, China
2
School of Management, Guilin University of Technology, Guilin, China
(shengxiangs@glite.edu.cn)
Abstract - Environmental risks are becoming
increasingly frequent and severe across the world, especially
in China. An in-depth understanding of how public
perceives risk is of crucial importance to effective
environmental risk communication and management. Risk
preference and emotion are two critical factors in
environmental risk perception. This paper summarizes
existing researches in risk preference and emotion, and
reflects upon their roles in environmental risk perception.
Based upon existing literatures, it argues that delay affects
environmental risk perception more than time preference
and proposes a research on disentangling time preference
and risk preference, i.e. risk preference at different time
periods. Under the guidance of Appraisal Theory, this paper
explores the roles of emotion in environmental risk
perception and attempts to combine it into the future
examining of delay effect on risk preference.
Keywords - Environmental risk perception,
preference, time dealy effect, emotion, Apprial Theory
I.
risk
INTRODUCTION
The recent years has seen the sharp increase in
environmental risk frequency and severity, causing
casualty and financial loss. The petroleum leakage
accident in the Bohai Sea and the cadmium pollution in
Guangxi are typical examples of recent environmental
risk events in China. Environmental risk management has
become an important task for central and local
governments in China.
When reviewing upon public reactions in these
environmental risk events, we find that common people
typically lack objective judgment and usually overreact in
panic. However, people are apparently ignoring
environmental risks like air pollution, climate change, and
soil contamination in daily life. Such an obvious contrast
cannot be fully explained by existent theories in decision
research, psychology and risk management. According to
the results of latest researches in this field, risk preference
and emotion are two important underlying factors in such
an obvious contrast [1][2].
Traditional rationality paradigm in decision theory
attributes people’s responses to risks to the probability
and severity. For long-term risks like environmental risks
which have noticeable time delays, scholars combine time
preference into the decision process. As for the
relationship between time preference and risk preference
(manifested by subjective probability), most researches
have treated them as independent from each other. Some
scholars even simply equal subjective probability to
statistical probability, absolutely ignoring the nonlinearity of people’s real risk preference.
People have long felt that their instant emotion holds
a great power on their perception of uncertainty,
environmental risks included. Researches into emotion
and risk perception in the past few decades have shown
that the role of emotion in risk perception is more
important than previously thought. Advancement in
appraisal theory has brought many new and more
convincing insights into how emotion is elicited,
combined with appraisal, and why people’s emotional
responses vary so much for the same environmental risk.
To research further into the relationship between time
and risk preference and combine emotion into it is of
great importance to better understanding of environmental
risks. This paper will review researches in risk preference
and emotion in environmental risk perception. It will
proceed as follows. Section Ⅱ will reflect on research
development in the entangling relationship between risk
preference and time preference, emphasizing its influence
on environmental risk perception. Section Ⅲ will
summarize theories and findings concerning emotion, its
effect upon environmental risk perception in particular.
Section Ⅳ will discuss our research plan to explore the
time delay effect on risk preference, especially its
influence on environmental risk perception, and its
combination with emotion in specific environmental risks
like nuclear leakage, and air pollution. Section Ⅴ will
discuss our expected results, and the problems we meet in
design our research plan. Also directions for future
researches are shown in this section.
II. RISK PREFERENCE IN ENVIRONMENTAL
RISK PERCEPTION
Environmental risks are typically intertemporal risks,
with delayed consequences and high uncertainty [3].
Perception of environmental risks involves both objective
factors and subjective factors. Risk preference is one of
the two main subjective factors in environmental risk
perception, together with time preference. Although it is
generally accepted that people can be risk-averse, riskneutral, or risk-seeking, it is more practical to assume all
human beings are averse towards environmental risks,
since they cannot get any benefit from environmental
risks. Also, it is reasonable to assume that all people
require compensation for delayed benefit, i.e. people are
averse to time delay.
Risk preference manifests people’s attitudes towards
risks. It is usually measured via the comparison between
expected value and subjective certainty equivalent. When
the subjective certainty equivalent of a risky option is
equal to its expected value, the decision maker is riskneural; when lower than expected value, he is risk-averse;
and when greater than expected value, he is risk-seeking.
Extensive explorations have been conducted in this field.
The first and perhaps most influential result is the
expected utility theory. This model received widespread
support and became the basis for decision under
uncertainty in several decades, due to clarity and
simplicity in both logic and form. While in financial field
Markowitz proposed his risk–return model to explain the
St. Petersburg Paradox. However, the findings of more
and more anomalies, like framing effect, challenged the
two theories. It was under this situation that prospect
theory was proposed.
Time preference shows people’s discounting of future
gain or loss. Extensive researches have been conducted in
time preference, bringing forth multiple theories and
findings. The Discounted Utility (DU) model is the first
widely accepted model, in which future utility is
manifested by utility discounting factor. Later researches
found many anomalies, greatly undermining the validity
of the DU model. To better explain people’s real activities
under time delay researchers proposed models like
hyperbolic discounting [4], and hyperboloid discounting [5].
For intertemporal risks, discounted expected utility
has long been the dominant model to explain people’s
attitudes towards both time delay and uncertainty at the
same time. However, its underlying assumption that
people are risk neutral towards gains and losses is under
criticize.
Although both risk preference and time preference in
intertemporal risks have been researched in detail, few
have focused on the relationship between them, simply
treating them as orthogonal dimensions. Recently, some
studies have noticed that time delay can affect subjective
probability judgment [6]. Some researchers treat time
delay as an implicit risk, arguing that time delay increases
aversion towards risk [7]. Some other researchers use
impatience to argue that time delay makes people more
risk-averse. While Construal Level theory [8] suggests that
time delay reduces risk aversion. Latest behavioral
experiments show that time delay makes people more risk
tolerant. Anyhow, researches in neuroscience [9] and
biology [10] strongly support that time has an impact on
risk preference.
Risk preference greatly affects people’s perception of
environmental risks. Risk preference changes people’s
subjective probability of a risk event. For example, higher
risk aversion increases people’s subjective probability of
environmental risk. Studies have found that people with
different risk preference levels exhibit greatly different
attitudes towards environmental risks and relevant
policies and measures [11]. In a cross-cultural research as
for environmental risk perception, Duan and Fortner
found that Chinese people are more risk averse than
Americans, and consequently more concerned with
environmental risks [12].
Combing the fact that time delay affects both time
preference and risk preference, we can logically deduce
that time delay affects people’s perception of long-term
risks like environmental ones more than time preference
does. Our finding can improve our understanding of
environmental risk perception in a more precise way. This
new finding can better explain and predict people’s
environmental risk related behavior.
III. EMTION IN ENVIRONMENTAL RISK
PERCEPTION
In the traditional rationality paradigm, emotion
was treated as an external interference in risk perception,
like many other subjective factors. With the psychological
researches in environmental risk field, it has been found
and widely accepted that environmental risk perception is
closely related to individual traits, besides that objective
condition of environmental risks [13]. In fact, many studies
have shown that emotion is very important in
environmental risk perception, more than only being
external interference. The newly proposed Appraisal
Theory has attempted to combine both cognition and
affection into environmental risk perception, in favor of a
dual-process model.
Appraisal theory has found that feelings involved in
environmental risks are more than simply bad or good
affect [14]. Anger, fear and other specific emotions have
been found very important in perception of environmental
risks. The role of emotion in environmental risk
perception can be analyzed from three kinds of different
models — relational, process, and structural models.
Relational models attempt to explain why individual’s
emotional responses to the same environmental risk are so
different [1]. It has been found that values, abilities, goals
and needs are valid reasons for the difference in
environmental risk related emotions [15]. Process models
aim at finding how people’s emotion is elicited when
faced with risks. However, no specific research in
environmental risk perception has been conducted under
this type of model. Structural models explore the implicit
relationship between emotion and environmental risk
appraisal. These three kinds of models have the potential
to be integrated as tried by Peters and his colleagues [16].
Studies have confirmed that emotion is closely related to
environmental risk appraisals [17]. Causes of emotion in
environmental risks can be classified as the agency,
coping potential, fairness, certainty, and outcome
desirability [17].
Emotion is one of the causes of behavioral tendency
[1]
. Different emotion in risk perception can cause
different environmental risk actions, implying the
important role of emotion in environmental risk
management. However, emotion is far from being the
sufficient condition of behavior [3-5]. Environmental risk
types and cultural factors coordinate the relationships
between emotions and behaviors. In addition, different
people have different ways to express their emotions. It
requires further researches to find what emotions are
relevant in specific environmental risks, and what are the
effects of appraisals on emotional reactions in specific
environmental risks. In brief, future research can focus on
the particular factors in emotion in specific environmental
risks, like nuclear leakage, water pollution, and soil
contamination.
IV. FUTURE RESEARCH
The intertwinement of time preference and risk
preference in environmental risk perception requires the
effort to disentangle them. The research into the effect of
time delay on risk preference is the key, since it has been
found that time preference is stable under different
uncertainties [3].
The following simple question can show the existence
of time delay effect upon risk preference. If a man treats
$1,000 which is to be paid one year later as equivalent to
$800 today, and treats $800 as the certainty equivalent to
a $2,000 or $0 risky option with probability of 50 to 50,
will he be indifferent to the same risky option to be
resolved and paid one year later and a certain amount of
$640 ($800/ ($1,000/$800))? Some recent studies have
found people will prefer risky option to certain amount of
$640 [18].
We will extend the study in this topic, and expects to
get reasonable and convincing result on time delay effect
upon risk preference. The further research plan would
consist of two types of research, laboratory behavioral
experiments and questionnaire survey. For laboratory
behavioral experiments, we will design a bunch of
lotteries with different probabilities and results under both
gain and loss situations. A possible design for loss
situation is shown in following table.
TABLE I
BEHAVIORAL EXPERIMENT LOTTERY DESIGN
1
2
3
4
5
X
-1200
-1200
-600
-1200
-600
P
1/6
2/6
2/6
2/6
2/6
y
0
6
0
7
0
8
-600
9
-400
10
X
-1000
-1200
-1200
-1200
-1200
P
2/6
2/6
3/6
4/6
5/6
y
-900
0
0
0
0
As shown by the table, we will use 10 different
lotteries with different combination of results and
probability. Each lottery will be exercise under four
different time delays, 0 day, 6 week, 12 week, and any
uncertain time between 0 day and 12 weeks. Therefore,
participants in the experiment will face 40 different
choices.
Different from Noussair and Wu [18], we will assume
no specific models on expected values, especially the
linear relationship between probability and probability
weighting function, i.e. subjective probability. We will
ask subjects to report certainty equivalent on exercise date
for each lottery rather the present value. Data will be
collected and analyzed, comparing the certainty
equivalents for the same lottery under different time
delays. By imposing specific form on probability, we will
be able to analyze further into the structure of time delay
effect on risk preference.
Given the influence of emotion on risk perception,
we will also test how different emotions affect people’s
risk preference under delay. We will try to elicit different
emotions among subjects with different contents and ask
them to answer questions which are designed to test their
emotions. By comparing the certainty equivalents of the
same lottery with the same time delay under different
emotions, it is able to catch insight into how specific
emotions affect risk preference.
The questionnaire survey will feature specific
environmental risks, like nuclear leakage, water pollution,
soil contamination or air pollution. With properly
designed questionnaire, we will gain data reflecting both
people’s risk preference in a specific environmental risk,
and how their instant emotion affects time delay effect on
risk preference.
The subjects will include students, teachers, and
white collar workers. Those who join in laboratory
behavioral experiments will be well guided before the
experiments to well understand the effect of their choice
and get some amount of money as reward according to
their performance.
V. CONCLUSION
The roles of risk preference and time preference in
environmental risks are crucial. The finding that risk
preference can be affected by time delay is of value in
understanding people’s environmental risk perceptions.
We expect to find that time delay makes people more risk
tolerant. Based upon this, we will gain a new approach to
explain
people
overreaction
towards
temporal
environmental risks, and their neglect for long-term
environmental risks like global warming. As for emotion,
we anticipate to find that overwhelming emotions can
greatly change people’ risk preference and time delay
effect on risk preference.
This research will be the first study to explore the
effect of time delay on environmental risk perception. It
is also supposed to be the first study that combines risk
preference and emotion in environmental risk perception.
Also, it will provide evidence for identifying the
difference between people’s risk preference under gain
situations and that under loss situations. We hope to catch
insight into the role of risk preference and emotion in
environmental risk perception, especially the effect of
time delay on risk preference with application in
environmental issues. Our research will provide deeper
insights to people’s attitudes towards environmental risks,
and thus offer better guidance for relevant environmental
risk communication and management.
[12] DuanHongxia and Fortner Rosanne, “A cross-cultural study
[13]
ACKNOWLEDGMENT
This work was supported by the National Science and
Technology Support Program (2009BAK53B06), the
National Natural Science Foundation of China
(71101035) and the Humanities and Social Sciences of
Education Ministry (12YJA880130).
[14]
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