Sunday, July 25, 2010

Hazards: Rational Choices

The dominant approach to the study of hazards doesn’t mean that the action of people can’t be studied, just that a particular type of behaviour is often expected – rational behaviour. Given a set of choices, you will behave in a certain way and numbers can be put to that predictability. It may be that this behaviour will be modelled statistically, 95% of the time you will choose A, 5% of the time B, or 95% of individuals in a particular set of circumstances will choose A, only 5% will choose B. you get the idea. Assuming the behaviour of individuals is predictable given a context, means that responses can be modelled and planned for.

An earthquake hits a major urban area in the US. You don’t really want the authorities to spend time trying to second-guess what people will do, you really want them to use their experience and insights from experts to rapidly rescue people. A plane shudders to a halt during take-off and the smell of burning fills you nostrils. Aren’t you glad experiments and computer models gave engineers the answers as to how people behave in such a situation and so where to put the exits to try to get as many panicking people out as possible.

But if people are rational then why are seemingly irrational choices made everyday and everywhere? Why do farmers persist on farming on the flood plain in Bangladesh, why are houses still built on the flood plain in Britain, why do fishermen set to sea when the weather forecasts a hurricane? These decisions can still be viewed as rational. Take the fisherman and the hurricane, a classic problem in rationality used by Burton, White and Kates back in the 1970s to illustrate the behaviour of individuals in hazards.

They suggest that understanding rational behaviour may be better understood if it is represented as a series of possible choices or alternatives given a particular or expected state of nature (Figure 1). For each state of nature and alternative action available, the individual will judge the consequences of their actions and choose the most rational option. The individual has to appraise what the state of nature is, not the easiest thing to do, as well as be aware of the range of alternative actions available. Assuming that the researcher can limit this choice depending on the individual’s experience and circumstances there are still problems with the simple application of this model.

Figure 1 Hazards, choices, state of nature

The individual and even the researcher may be operating in complete ignorance of how nature operates so there is complete uncertainty. In this case Burton, White and Kates suggest that ‘expected utility’ will be the rational mode of decision making – thus giving away the debt to economics and economic reasoning that this view of individuals has (Figure 2). In this case the numbers in brackets represent the payoffs of each alternative action. Rationally, the fisherman will be expected to remain at sea and fish.

Figure 2 Rational chocies for fisherman

Where there is a known probability of an event occurring then the payoffs can be altered to reflect this as in Figure 3. Here the 40% probability of a hurricane (0.4) changes the likely payoffs of each alternative action. (For the remain, no hurricane cell, for example, the new payoff is now the probability of no hurricane or 0.6 multiplied by the old payoff of +2 which gives a new payoff of +1.2). The remain option is still the rational one but the difference between it and evacuating is now a lot less, particularly if the payoff of 0 for the remain option is considered if the fisherman is proved to the wrong and a hurricane does happen.

Figure 3 Choices based on probabilities of events and alternative actions

The fisherman may not think in terms of scientific probabilities but may apply their own experience knowledge and subjective reasoning to the problem. This may alter the payoff again as in Figure 4. In this figure the fisherman has a high expectation of a hurricane, translated to a probability of 0.9. What this is based on is open to quesiton. It may be a general view amongst fisherman that hurricanes are likely at this time of year in this place or it may be more personal - a childhood memory of a major hurricane clouds the perception of an individual. Whatever the cause of this perception it is somehow translateable as a probability. Now it is clear from the matrix in Figure 4 that evacuation is the rational option but based on the subjective probabilities. This type of decision making might not be classed as rational by some experts. If the level of regret is considered, then the fisherman might evacuate at the first hint of a hurricane rather then even consider weighing up options.

Figure 4 Choices based on subjective probabilities

Do people act like this? Do you carefully weigh up the alternatives available to you every time you have to make a decision? Do you consider all the information available to you? Who you are, where you are, what you have been through have no bearing on what decision you make? Being flooded out one year has no bearing on what you do this year? Including or even working solely with subjective probabilities as in Figure 3 may seem a way around this problem of seeming irrationality in decision making but is it really just a fudge? Subjective probabilities still implies that a number, a probability, can be assigned to every alternative and that that number is based on something (and possible even consistent through time). People are a lot more annoying than that – after a decision I am sure virtually everyone can justify having made that choice. Ask them at the time, presuming they have time in a major earthquake with masonry falling all around them as they drag their family to what they hope is safety – and that individual will not be able to tell you why they make a certain decision and not another.

Most decisions are taken with limited information acquired because the individual is who they are and in the circumstances they are. A poor resident of New Orleans has different access to information sources than a rich resident. Information is not action. Individual will interpret and then act (or not) upon information in different ways. These differences could be dependent on their background, their class, their access to resources (real or perceived), their belief systems and a whole manner of complex and interacting factors that might just be amendable to statistically modelling (e.g. people from socio-economic group A are more likely to act in way B as they have access to resources, better information, more insurance, etc) but are unlikely to tell you why a specific individual, in a specific stressed situation made a specific decision. In a disaster the specifics are vital are they as important before and after?

The classic text on hazards by Burton, Kates and White is worth reading to help to understand these ideas.

The Environment as Hazard by Ian Burton, Robert Kates and Gilbert White (1993)

No comments:

Post a Comment