Perceived risk

The cost of capital is what it costs a company to borrow money from aU sources. Three general sources of capital available are borrowed money, equity capital, and retained earnings. For borrowed capital (from investment houses, banks, insurance companies, and venture capitalists), the interest rate on loans is a few percentage points above the prevailing prime interest rate. The interest rate charged also depends on the length of the loan, size of the loan, and potential risk perceived by the lender. For equity capital, obtained from the sale of preferred and/or common stock, companies may float new stock issues or have shares of stock that may be released to secure capital funds. Retained earnings or reserves may be used to the extent of their availability. 

The major factor that influences parental decisions is the perceived risk of the research. It is important to distinguish the risks perceived when considering participation from the risk appreciated while participating in the study. In one study, 74% of parents when asked about hypothetical enrolment of their newborn into a clinical trial refused to participate because of the perceived risk of side effects and the unproved efficacy of the trial medication (Autret et al., 1993). Even the perception of minor risk such as painful procedures may sway parents choice on participation (Langley et al., 1998). 

Individual risk Real collective risk Perceived collective risk ... 

The move is highly significant, as it would be the first time a major jurisdiction adopts specific regulations to deal with the risks perceived from nanotechnologies. 

Perception of risk Perceiving the risk of an action as lower or higher than it really is can lead to inaction, no action, or inappropriate action than can cause unsafe conditions and can lead to further human errors. 

As reported by researchers and industry that there are many motivating factors to invest in the development of robust and practical enterprise safety management systems. Among these, maintain company s existence, retains trust in clients, reduce operation risks and costs and major accidents, and lower the risk perceived by the investment community. Other benefits related to productivity such as increase the productivity and annual savings. 

The pubhc perceives the risk of nuclear power to be much greater than that deterrnined by experts (4). Among explanations for the discrepancy are the behef in the possibiUty of a disaster and the association of reactors with weapons. Living 50 years within five miles of a nuclear power plant has been shown to be comparable in terms of risk to smoking 1.4 cigarettes during the same period (5). 

The technology leader must recognize that in the context in which industrial R D is conducted, certain societal concerns over the perceived risks can make specific technologies, products, or processes unacceptable in the marketplace and render some technological innovation unfortunately irrelevant. 

Considerable effort has been devoted to finding alternative fibers or minerals to replace asbestos fibers ia their appHcations. Such efforts have been motivated by various reasons, typically, avadabihty and cost, and more recendy, health concerns. During Wodd War I, some countries lost access to asbestos fiber suppHes and had to develop substitute materials. Also, ia the production of fiber reiaforced cement products, many developiug countries focused on alternatives to asbestos fibers, ia particular on cellulose fibers readily available locally at minimal cost. Siace the 1980s however, systematic research has been pursued ia several iudustrialized countries to replace asbestos fibers ia all of their current appHcations because of perceived health risks. 

Before a decision is made, all three items, ie, investment, return, and rate of return, would be examined, as would the current cash position, perceived risk, other venture opportunities, and a variety of subjective criteria. Eor this elementary situation, economists would also employ an incremental approach analogous to the above, based on the tenet that each increment of investment should itself make an adequate return. Rarely is there a unique correct decision. Only future events determine the wisdom of the selection even then, the results that another decision would have produced are rarely known. This is the essence of profitabiHty analysis. 

Vincent T. Covello et al. (eds.), The Analysis of Actual Versus Perceived Risks, Plenum Press, New York, NY, 1983. 

Equation 1,4-7 is unsatisfactory because the risk from a large number of small accidents is the same as from a small number of large accidents if the total number of effects, say fatalities, is the same for each case. It is hypothesized that the perceived risk of a large accident is greater than the equivalent risk from many small accidents because of human nature and the emphasis of the news services on the unusual (50,OCX) traffic deaths per year is not newsworthy, but a single accident killing 50,000 is very newsworthy). 

Starr, 1969 approached this by investigating the "revealed preferences exhibited in society ls the result of trial and error. (Similar to the "efficient market theory" in the stock market.) Stan-conjectured that the risk of death from disease appears to determine a level of acceptable voluntary risk but that society requires a much lower level for involuntary risk. He noted that individuals seem to accept a much higher risk (by about 1000 times) if it is voluntary, e.g., sky-diving or mountain climbing, than if it is imposed, such as electric power or commercial air travel, by a correlating with the perceived benefit. From this study, a "law" of acceptable risk was found concluding that risk acceptability is proportional cube of the benefits. Figure 1.4.4-1 from Starr, 1972 shows these relationships. One aspect of revealed preferences is that these preferences do not necessarily remain constant (Starr et al., 1976). In Starr et al., 1976, it is shown that while nuclear power has the least risk of those activities compared, it also has the least perceived benefit. Clearly the public thinks that... 

Cuvello, V T., 1981, Actual and Perceived Risk A Review of the Literature, in Technological Risk Assessment edited by P. F. Ricci et al. NATO ASI Series E-81, Martinos Nijtioff Publisher, The Hague, Netherlands. 

Thomas, K., 1981, Comparative Risk Perception How the Public Perceives the Risks and Benefits of Energy Systems in The Assessment and Perception of Risk, Royal Society, Gordon pp 35-50. 

The results clearly indicated that the ventilation noise was perceived as most acceptable when the tone was situated in the low er part of the frequency range. The experience of disturbance and the associated effects occur at exposure levels above the auditory perception threshold. Above this level, the risk of these effects increases as the perceived loudness increases, provided that the other conditions remain constant. Since the loudness can be predicted relatively accurately by means of technical measurements, any differences in the degree of disturbance can also be predicted by reference to these measurements, provided that they are dependent on differences in the loudness. 

The drive for these additional requirements has come not from the suppliers but from users, such as the automotive, utilities, telecommunications, software, and aerospace industries which purchase millions of products and services used to produce the goods and services they provide to the consumer. Rather than invoke customer-specific conditions in each contract, the larger purchasers perceive real benefits from agreeing common quality system requirements for their industry sector. Quite often a supplier will be supplying more than one customer in a particular sector and hence costs increase for both the supplier and the customer if the supplier has to meet different requirements that serve the same objective. All customers desire products and services that consistently/ meet their requirements. While the physical and functional requirements for the product or service will differ, the requirements governing the manner in which their quality is to be achieved, controlled, and assured need not differ. Differences in quality system requirements may arise between industry sectors where the technology, complexity, and risks are different. 

ISO/TS 16949 is not a set of requirements for producing documentation (as many perceive ISO 9000 to be). It contains requirements that address the key characteristics of a quality system which if not met will put product quality (and consequently customer satisfaction) at risk. 

One of the most serious stressors to personnel working in many chemical processes is the perception of danger by the workers arising from ineffective control and supervision of these systems. Despite the fact that modem plants are equipped with automated protection systems, there is always some perception of potential risk in their operation. Serious threats can be posed not only for those within the plant, but also for the neighboring public. An environment that is perceived as being highly dangerous will increase the stress experienced by the workers and may have a detrimental effect on their performance. 

The somewhat controversial theory of risk homeostasis is relevant to a discussion of risk taking. RHT was developed initially in the area of driving behavior (Wilde, 1984). The theory states that accident rates are not determined by actual levels of intrinsic risk but by the levels of risk acceptable to individuals in the situation. The theory implies that people adjust their risk-taking behavior to maintain a constant level of perceived risk. Thus, if improved safety measures are introduced (e.g., better guarding, improved protection systems then individuals will behave in a more risky fashion in order to maintain their accustomed levels of risk. 

Slovic, P., Fischhoff, B., Lichenstein, S. (1981). Perceived Risk Psychological Factors and Social Implications. Proceedings of the Royal Society of London 376,17-34. 

Most human or environmental healtli hazards can be evaluated by dissecting tlie analysis into four parts liazard identification, dose-response assessment or hazard assessment, exposure assessment, and risk characterization. For some perceived healtli liazards, tlie risk assessment might stop with tlie first step, liazard identification, if no adverse effect is identified or if an agency elects to take regulatory action witliout furtlier analysis. Regarding liazard identification, a hazard is defined as a toxic agent or a set of conditions that luis the potential to cause adverse effects to hmnan health or tlie environment. Healtli hazard identification involves an evaluation of various forms of information in order to identify the different liaz.ards. Dose-response or toxicity assessment is required in an overall assessment responses/cffects can vary widely since all chemicals and contaminants vary in their capacity to cause adverse effects. This step frequently requires that assumptions be made to relate... 

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