The Precautionary Principle as a Heuristic Patch

Kaivanto, Kim and Kwon, Winston (2015): The Precautionary Principle as a Heuristic Patch.

Abstract

In this paper we attempt to recover an integrated conception of the Precautionary Principle (PP). The alpha=0.05$ inferential-threshold convention widely employed in science is ill-suited to the requirements of policy decision making because it is fixed and unresponsive to the cost trade-offs that are the defining concern of policy decision making. Statistical decision theory -- particularly in its Signal-Detection Theory (SDT) variant -- provides a standard framework within which to incorporate the (mis)classification costs associated with deciding between intervention and non-intervention. We show that the PP implements preventive intervention in precisely those circumstances where the SDT-based model yields a (1,1) corner solution. Thus the PP can be understood as a heuristic variant of the SDT corner solution, which in turn serves to patch the incongruity between the inferential practices of science and the inferential requirements of policy decision making. Furthermore, SDT's analytical structure directs attention to a small number of variables -- (mis)classification costs and prior probabilities -- as determinants of the (1,1) corner solution. Subjective biases impinging upon these variables -- omission bias, protected values, and the affect heuristic in particular, moderated by the decision maker's industry-aligned (insider) or industry-opposed (outsider) status -- combine within SDT to successfully retrodict features of the PP previously considered puzzling, if not inconsistent or incoherent. These psychological biases do not exclude, and may in part reflect, the decision maker's deontological moral beliefs, or indeed social norms embodied in the nation's legal system (common law vs. civil law).

• Item Type: MPRA Paper
• Language: English
• Keywords: precautionary principle; misclassification costs; scientific uncertainty; omission bias; affect heuristic; null-hypothesis significance testing; signal-detection theory; behavioral economics
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; K - Law and Economics > K3 - Other Substantive Areas of Law > K32 - Environmental, Health, and Safety Law; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy

References

Alhakami AS, Slovic P. A psychological study of the inverse relationship between perceived risk and perceived benefit. Risk Analysis, 1994; 14:1085--1096.

Asch DA, Baron J, Hershey JC, Kunreuther H, Meszaros J, Ritov I, Spranca M. Omission bias and pertussis vaccination. Medical Decision Making, 1994; 14:118--123.

Baron J, Leshner S. How serious are expressions of protected values? Journal of Experimental Psychology: Applied, 2000; 6:183--194.

Baron J, Ritov I. Omission bias, individual differences, and normality. Organizational Behavior and Human Decision Processes, 2004; 94:74--85.

Baron J, Ritov I. Protected values and omission bias as deontological judgments. Psychology of Learning and Motivation, 2009; 50:133--167.

Baron J, Ritov I. Reference points and omission bias. Organizational Behavior and Human Decision Processes, 1994; 59:475--498.

Baron J, Spranca M. Protected values. Organizational Behavior and Human Decision Processes, 1997; 70:1--16.

Basili M. A rational decision rule with extreme events. Risk Analysis, 2006; 26:1721--1728.

Berger JO. Could Fisher, Jeffreys and Neyman have agreed on testing? Statistical Science, 2003; 18:1--32.

Blackwelder B. Testimony by Dr. Brent Blackwelder (President, Friends of the Earth) before the Senate Appropriations Committee, Concerning the Cloning of Humans and Genetic Modifications. January 24, 2002. Available from the Institute for Agriculture and Trade Policy, http://www.iatp.org/files/Testimony-By_Dr_Brent_BlackwelderBefore_the_Se.htm

Brown KF, Kroll JS, Hudson MJ, Ramsay M, Green J, Vincent CA, Fraser G, Sevdalis N. Omission bias and vaccine rejection by parents of healthy children: Implications for the influenza A/H1N1 vaccination programme. Vaccine, 2010; 28:4181--4185.

Connolly T, Rb J. Omission bias in vaccination decisions: Where's the ``omission''? Where's the ``bias''? Organizational Behavior and Human Decision Processes, 2003; 91:186--202.

Cowles M, Davis C. On the origins of the .05 level of statistical significance. American Psychologist, 1982; 37:553--558.

Cox DR. Statistical significance tests. British Journal of Clinical Pharmacology, 1982; 14:325--331.

Cross F. Paradoxical perils of the precautionary principle. Washington and Lee Law Review, 1996; 53:851--925.

Egan JE. Signal Detection Theory and ROC Analysis. London: Academic Press, 1975.

Feldbrugge FJM. Good and bad Samaritans: A comparative survey of criminal law provisions concerning failure to rescue. American Journal of Comparative Law, 1966; 14:630--657.

Finucane ML, Alhakami A, Slovic P, Johnson SM. The affect heuristic in judgments of risks and benefits. Journal of Behavioral Decision Making, 2000; 13:1--17.

Fisher RA. Statistical Methods for Research Workers. Edinburgh, UK: Oliver & Boyd, 1925.

Fisher RA. Statistical Methods and Scientific Inference (2nd ed.) New York, NY: Hafner Publishing, 1959.

Fisher RA. The arrangement of field experiments. Journal of the Ministry of Agriculture of Great Britain, 1926; 33:503--513.

Fisher RA. The Design of Experiments. Edinburgh, UK: Oliver & Boyd, 1935.

deFur PL, Kaszuba M. Implementing the precautionary principle. Science of the Total Environment, 2002; 288:155--165.

Ganzach Y. Judging risk and return of financial assets. Organizational Behavior and Human Decision Processes, 2000; 83:353--370.

Graham JD. Decision-analytic refinements of the precautionary principle. Journal of Risk Research, 2001; 4:127--141.

Graham JD, Wiener JW. Risk Versus Risk: Tradeoffs in Health and Environmental Protection. Cambridge, MA: Harvard University Press, 1995.

Green DM, Swets JA, Signal Detection Theory and Psychophysics. London: Wiley, 1966.

Hallsworth M, List JA, Metcalfe RD, Vlaev I. The making of homo honorarius: From omission to comission. NBER working paper no. 21210, http://www.nber.org/papers/w21210.

Hills SL, Berbaum KS. Using the mean-to-sigma ratio as a measure of the improperness of binormal ROC curves. Academic Radiology, 2011; 18:143--154.

Howard RA, Matheson JE, North DW. The decision to seed hurricanes. Science, 1972; 176:1191--1202.

Inglehart JK. Compensating children with vaccine-related injuries. New England Journal of Medicine, 1987; 316:1283--1288.

I.L.M. Second international conference on the protection of the North Sea: Ministerial declaration calling for reduction of pollution [London, November 25, 1987]. International Legal Materials, 1988; 27:835--848.

I.L.M. United Nations Conference on Environment and Development: Rio Declaration on Environment and Development [Rio de Janeiro, June 14, 1992]. International Legal Materials, 1992; 31:874--880.

Ioannidis PA. Why most published research findings are false. PLoS Medicine, 2005; 2:696--701.

Kahneman D, Miller DT. Norm theory: Comparing reality to its alternatives. Psychological Review, 1986; 93:136--153.

Kaivanto K. The effect of decentralized behavioral decision making on system-level risk. Risk Analysis, 2014; 34:2121--2142.

Kaivanto K, Kroll EB, Zabinski M. Bias-trigger manipulation and task-form understanding in Monty Hall. Economics Buletin, 2014; 34:89--98.

Kruschke JK. Bayesian data analysis. Wiley Interdisciplinary Reviews: Cognitive Science, 2010; 1:658--676.

Lehmann EL. The Fisher, Neyman-Pearson theories of testing hypotheses: One theory or two? Journal of the American statistical Association, 1993; 88:1242--1249.

Lehmann EL, Romano JP. Testing Statistical Hypotheses, 3rd edition. New York, NY: Springer, 2005.

Macmillan NA, Creelman CD. Detection Theory: A User's Guide. Cambridge: Cambridge University Press, 1991.

Moskowitz TJ, Wertheim LJ. Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won. New York, NY: Crown Archetype, 2011.

Neyman J. First Course in Probability and Statistics. New York, NY: Holt, 1950.

Neyman J. Discussion of Fisher (1935a). Journal of the Royal Statistical Society, 1935; 98:74--75.

Neyman J, Pearson ES. On the problem of the most efficient tests of statistical hypotheses. Philosophical Transactions of the Royal Society of London, Series A, 1933; 231:289--337.

Nickerson RS. Null hypothesis significance testing: A review of an old and continuing controversy. Psychological Methods, 2000; 5:241-301.

NOAA. Environmental Data Management at NOAA: Archiving, Stewardship, and Access. Washington, DC: The National Academies Press.

Page T. A generic view of toxic chemicals and similar risks. Ecology Law Quarterly, 1978; 7:207--244.

Peterson M. The precautionary principle is incoherent. Risk Analysis, 2006; 26:595--601.

Ritov I, Baron J. Protected values and omission bias. Organizational Behavior and Human Decision Processes, 1999; 79:79--94.

Ritov I, Baron J. Reluctance to vaccinate: Omission bias and ambiguity. Journal of Behavioral Decision Making, 1990; 3:263--277.

Ritov I, Baron J. Status-quo and omission biases. Journal of Risk and Uncertainty, 1992; 5:49--61.

Savage LJ. The Foundation of Statistics. New York, NY: John Wiley and Sons, 1954.

DeScioli P, Christner J, Kurzban R. The omission strategy. Psychological Science, 2011; 22:442--446.

Schweizer M. Loss aversion, omission bias and the civil standard of proof. In Mathias K (ed). European Perspectives on Behavioural Law and Economics. New York, NY: Springer, 2015:125--145.

Slovic P, Finucane ML, Peters E, MacGregor D. The affect heuristic. In: Gilovich T, Griffin D, Kahneman D (eds). Heuristics and Biases: The Psychology of Intuitive Judgment. New York, NY: Cambridge University Press, 2002:397–-420.

Slovic P, Finucane ML, Peters E, MacGregor DG. Risk as analysis and risk as feelings: Some thoughts about affect, reason, risk and rationality. Risk Analysis, 2004; 24:311--322.

Slovic P, MacGregor DG, Malmfors T, Purchase IFH. Influence of affective processes on toxicologists’ judgments of risk. Eugene, OR: Decision Research, 1997.

Slovic P, Peters E. Risk perception and affect. Current Directions in Psychological Science, 2006; 15:322--325.

Spranca M, Minsk E, Baron J. Omission and commission in judgment and choice. Journal of Experimental Social Psychology, 1991; 27:76--105.

Sterne AC, Smith GD. Sifting the evidence -- what's wrong with significance tests? British Medical Journal, 2001; 322:226--231.

Sunstein C. Laws of Fear: Beyond the Precautionary Principle. New York, NY: Cambridge University Press, 2005.

Tanner C, Medin DL, Iliev R. Influence of deontological versus consequentailist orientations on act choices and framing effects: When principles are more important than consequences. European Journal of Social Psychology, 2008; 38:757--769.

Tetlock PE, Kristel OV, Elson SB, Lerner JS, Green MC. The psychology of the unthinkable: Taboo trade-offs, forbidden base rates, and heretical counterfactuals. Journal of Personality and Social Psychology, 2000; 78:853--870.

Trafimow D, Marks M. Editorial. Basic and Applied Social Psychology, 2015; 37:1--2.

USDA. Colony Collapse Disorder Progress Report. Washington, DC: CCD Steering Committee, United States Department of Agriculture, 2010.

Wald A. Contributions to the theory of estimation and testing hypotheses. Annals of Mathematical Statistics, 1939; 10:299--326.

Wald A. Statistical Decision Functions. New York, NY: Wiley, 1950.

Yates F. The influence of Statistical Methods for Research Workers on the development of the science of statistics. Journal of the American Statistical Association, 1951; 46:19-34.

Zamir E, Ritov I. Loss aversion, omission bias, and the burden of proof in civil litigation. Journal of Legal Studies, 2012; 41:165--207.

Ziliak ST, McCloskey DN. The Cult of Statistical Significance: How the Standard Error Costs Us Jobs, Justice and Lives. Ann Arbor, MI: University of Michigan Press, 2008.