Equity in Social Risk: Some Empirical Observations

L. Robin Keller and Rakesh K. Sarin

Risk Analysis, 1988, vol. 8, issue 1, 135-146

Abstract: In societal risk analysis the equity of the distribution of risks is often an important consideration owing to the special nature of health risks. We empirically validate some assumptions about equity that have been discussed in the decision analytic literature. Our results show that the way fatalities are distributed throughout a society is considered along with the number of fatalities in evaluating alternative policies involving mortality risks. The concepts of ex ante equity and ex post equity are both shown to be important in judgments of fairness. We next present a decision model based on multiattribute preference theory incorporating the number of fatalities, as well as ex ante equity and ex post equity. When ex ante equity and ex post equity are positively weighted in this fair‐risk model, options with more equal risk distributions are ranked higher. Next we empirically show that the distribution of benefits has an impact on judgments of fairness. The fair‐risk model does not include information on the benefits distribution, so it would apply when benefits are distributed equally or when the decision maker wishes to not include benefits in the model. We briefly discuss how the notion of proportional equity can incorporate benefits into judgments of the fairness of risk distributions. We then include benefits in a more general model in which fair risk‐benefit combinations are those that are exchange equitable. A key implication of this envy‐free risk–benefit model is that an unequal distribution of risks may be preferred if it is accompanied by a compensatory differential in benefits consistent with peoples' preference tradeoffs between received benefits and assumed risks. Finally, we discuss how perceived deservedness may influence judgments about equity. We conclude with a discussion of the implications of research on alternative notions of equity for policy makers dealing with social risks.

Date: 1988
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https://doi.org/10.1111/j.1539-6924.1988.tb01160.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:8:y:1988:i:1:p:135-146

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