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Demographic influences on risk perceptions
252
Abstracts and Reviews
074097 (E60, B13)
An equity analysis of some radical suggestions for Australia’s retirement income system. Atkinson M., Creedy J., Knox D., The University of Melbourne, Centre for Actuarial Studies, , Research Paper, nr. 22, 1995, pp. 26. This paper has highlighted the complexity of the current structure of superannuation taxation in Australia. The difficulty is exacerbated by the way in which the tax structure interacts with the means-tested age pension. The complicated nature of the system makes it very difficult not only for individuals in their retirement planning, but also for policy makers in attempting to evaluate the redistributive and other implications of the tax structure. Two options for reforming the tax structure were proposed, involving different degrees of simplification. The implications of the proposed reforms for the distribution of lifetime income of a cohort of male employees were examined using a variety of inequality and tax progressivity measures. The study used the LITES simulation model, allowing for a variety of alternative-decisions to be made by individuals at retirement. It was found that the proposed simplifications have relatively minor effects, when compared with the present cumbersome system, on the redistributive impact of the tax structure in a life cycle framework. Indeed, the progressivity of the current system is substantially more sensitive to the decisions made by individuals at retirement regarding the investment of their accumulated savings and superannuation amounts. In this respect, it is also less robust than the alternative options. Keywords : Retirement, Tax. 074098 (E60, BlO) Baseline risk and preference for reductions in riskto-life. Horowitz J.K., Carson R.T. (*), University of Maryland, Maryland, University of California, California (*), Risk Analysis, Vol. 13, nr. 4, 1993, pp. 457-462. The typical model of individual attitudes toward risk-to-life suggests that an individual’s willingness to pay for a reduction in mortality risk increases with the baseline risk. The higher-baseline hypothesis has been the subject of several empirical tests but results have so far been mixed. Using survey evidence, we present a situation in which subjects do prefer to reduce risks for which the baseline is higher. This finding is robust to several alternative explanations. Survey responses reflect subjects’ concerns about government effectiveness in
risk reduction, environmental effects associated with the various hazards, and other idiosyncratic elements of the risks; however, these concerns appear.-6 occur iti addition to, not in lieu of, the preference to reduce higher risks. Keywords: baseline risk, consumer attitudes, logit. 074099 (E60,M54) Perceptions of nuclear and other risks in Japan and the United States. Hinman G.W., Rosa E.A., Kleinhesselink R.R., Lowinger T.C., Washington State University, Washington, Risk Analysis, Vol. 13, nr. 4, 1993, pp. 449-454. As part of a study of nuclear power development in Japan and the United States, surveys of perceptions of risk toward 30 activities, substances, and technologies have been carried out in the Pacific Norhtwest and Tokyo, Japan. The results show that people in both countries have the highest level of dread toward nuclear waste disposal, nuclear accidents, and nuclear war, greater even than their dread of crime and AIDS. In addition to comparisons of dread, the paper also discusses similarities and differences between the Japanese and American responses for other dimensions of risk perception. Keywords: nuclear risk, risk perception. 074100 (E60, E43) Demographic influences on risk perceptions. Savage $Northwestern University, Illinois, Risk Analysis, Vol. 13, nr. 4, 1993, pp. 413-420. Over the past 15 years, psychologists have empirically investigated how people perceive technological, consumer, and natural hazards. The psychometric attitudes to risk being summarized by three factors: “dread,” whether the risk is known, and’ personal exposure to risk. The results have been used to suggest that certain types of hazards are viewed very differently from other hazards. The purpose of this paper is somewhat different, in that it investigates whether individualdemographic characteristics influence psychometric perceptions of risk. This paper makes use of a large, professionally conducted, survey%of a wide cross-section of the residents of metropolitan Chicago. One thousand adults were interviewed in a random-digit dial telephone survey, producing a useable dataset of about 800. Data on the three risk factors mentioned above were obtained on 7-point scales for four common hazards: aviation accidents, fires in the home,
Abstracts and Reviews automobile accidents, and stomach cancer. The survey also collected demographic data on respondents’ age, schooling, income, ..~~_ sex and race. Regressions were then conducted to relate the demographic characteristics to risk perceptions. Some strong general conclusions can be drawn. The results suggest that women, people with lower levels of schooling and income, younger people, and blacks have more dread of hazards. The exception being age-related illnesses which, not unnaturally, are feared by older people. Unlike previous literature, we cannot substantiate the argument that these groups of people are less informed about hazards and thus less accepting of them. The most likely leading explanation of the relationship between demographic factors and dread of a hazard is the perceived personal exposure to the hazard. People with greater perceived exposure to a hazard are more fearful. Keywords: perceptions, demographics. 074101 (E60, M54, B20) The health impact of major nuclear accidents: the case of Greece. ..Kollas J.G., Risk Analysis, Vol. 13, nr. 5, 1993, pp. 503-508. An assessment of the radiological consequences that would result for the population of Greece from postulated major nuclear accidents in the Kozloduy nuclear power station in Bulgaria is performed. Kozloduy lies at a distance of 225 km from the northern borders of Greece and contains six reactors, all of the Russian WWER type. The postulated accidents that are classified as level 7 accidents on the International Nuclear Event Scale, involve significant releases of radioactive materials into the environment, and widespread health and environmental effects. The analysis is performed by the MACCS code. The estimated consequences are compared to the corresponding actual impact of the Chernobyl accident in Greece. The results of the analysis indicate that, under the conservative assumptions adopted, the radiological consequences of the most severe accidents considered would be about 1.5 orders of magnitude larger than the actual radiological consequences of the Chernobyl accident. Keywords: nuclear risk, radiation. 074102 (E60, B20) Curbing the rising premiums for older policy holders in German private health insurance - a simulation study - .
253
Drees H., Milbrodt H., Bliitter der Deutschen Gesellschaft fiir Versicherungsmathematik, Vol. 22, nr. .C.. 2, 1995, pp. 393-418. z. We deal with the problem of rising premiums for older policy holders within the German private health insurance. There are several reasons for this problem: permanently increasing health costs, the “mathematical old age problem” arising through the fiction of fixed health costs, permanently steeper and steeper profiles and the declining intensity of decrement especially within the group of the older policy holders. Measures are currently examined to curb the rising premiums for older policy holders; these measures follow the example of 0 12 a VAG (German insurance supervisory law), but go beyond these regulations as concerns the extent of the used profits. They are compared to the additional implementation of dynamic models and provisional tariffs where an old age premium reduction is financed through additional premiums in younger years. Starting point is a computer simulation on the basis of the per head claims published by the association of the German private health insurance companies. For the first time, the fact that profiles become steeper and steeper is taken into account. As shown in our results, the effect of the reduction of the “extended VAG model” on the private health insurance premiums during old age is considerable, the extent of the premium reduction, however, being very largely dependent on the age position of the policy holder within the portfolio. Older policy holders who enter the group of the favoured at a stage where this group is still small profit extremely high from these measures. However, if one further develops the prevailing per head claims, the extended VAG model alone does not guarantee affordable private health insurance premiums during old age. Hence, the cost development has to be influenced or supplementary elements - like dynamic models or provisional annuities - have to be included. But even then it looks like it will be necessary in the long run to influence the costs. Even a slightly more favourable development of the per head claims leads to persistently cheaper premiums during old age. This calculation basis is therefore extremely critical. Dynamic models produce higher costs and significantly increase the start-up premiums. Therefore, suitable provisional tariffs are a preferable means of supplementing the extended VAG model. They also increase the start-up premiums, however, they do not have a negative influence on the health and administration costs. If provisional annuities are calculated pursuant to and with the calculation basis of
Abstracts and Reviews
074097 (E60, B13)
An equity analysis of some radical suggestions for Australia’s retirement income system. Atkinson M., Creedy J., Knox D., The University of Melbourne, Centre for Actuarial Studies, , Research Paper, nr. 22, 1995, pp. 26. This paper has highlighted the complexity of the current structure of superannuation taxation in Australia. The difficulty is exacerbated by the way in which the tax structure interacts with the means-tested age pension. The complicated nature of the system makes it very difficult not only for individuals in their retirement planning, but also for policy makers in attempting to evaluate the redistributive and other implications of the tax structure. Two options for reforming the tax structure were proposed, involving different degrees of simplification. The implications of the proposed reforms for the distribution of lifetime income of a cohort of male employees were examined using a variety of inequality and tax progressivity measures. The study used the LITES simulation model, allowing for a variety of alternative-decisions to be made by individuals at retirement. It was found that the proposed simplifications have relatively minor effects, when compared with the present cumbersome system, on the redistributive impact of the tax structure in a life cycle framework. Indeed, the progressivity of the current system is substantially more sensitive to the decisions made by individuals at retirement regarding the investment of their accumulated savings and superannuation amounts. In this respect, it is also less robust than the alternative options. Keywords : Retirement, Tax. 074098 (E60, BlO) Baseline risk and preference for reductions in riskto-life. Horowitz J.K., Carson R.T. (*), University of Maryland, Maryland, University of California, California (*), Risk Analysis, Vol. 13, nr. 4, 1993, pp. 457-462. The typical model of individual attitudes toward risk-to-life suggests that an individual’s willingness to pay for a reduction in mortality risk increases with the baseline risk. The higher-baseline hypothesis has been the subject of several empirical tests but results have so far been mixed. Using survey evidence, we present a situation in which subjects do prefer to reduce risks for which the baseline is higher. This finding is robust to several alternative explanations. Survey responses reflect subjects’ concerns about government effectiveness in
risk reduction, environmental effects associated with the various hazards, and other idiosyncratic elements of the risks; however, these concerns appear.-6 occur iti addition to, not in lieu of, the preference to reduce higher risks. Keywords: baseline risk, consumer attitudes, logit. 074099 (E60,M54) Perceptions of nuclear and other risks in Japan and the United States. Hinman G.W., Rosa E.A., Kleinhesselink R.R., Lowinger T.C., Washington State University, Washington, Risk Analysis, Vol. 13, nr. 4, 1993, pp. 449-454. As part of a study of nuclear power development in Japan and the United States, surveys of perceptions of risk toward 30 activities, substances, and technologies have been carried out in the Pacific Norhtwest and Tokyo, Japan. The results show that people in both countries have the highest level of dread toward nuclear waste disposal, nuclear accidents, and nuclear war, greater even than their dread of crime and AIDS. In addition to comparisons of dread, the paper also discusses similarities and differences between the Japanese and American responses for other dimensions of risk perception. Keywords: nuclear risk, risk perception. 074100 (E60, E43) Demographic influences on risk perceptions. Savage $Northwestern University, Illinois, Risk Analysis, Vol. 13, nr. 4, 1993, pp. 413-420. Over the past 15 years, psychologists have empirically investigated how people perceive technological, consumer, and natural hazards. The psychometric attitudes to risk being summarized by three factors: “dread,” whether the risk is known, and’ personal exposure to risk. The results have been used to suggest that certain types of hazards are viewed very differently from other hazards. The purpose of this paper is somewhat different, in that it investigates whether individualdemographic characteristics influence psychometric perceptions of risk. This paper makes use of a large, professionally conducted, survey%of a wide cross-section of the residents of metropolitan Chicago. One thousand adults were interviewed in a random-digit dial telephone survey, producing a useable dataset of about 800. Data on the three risk factors mentioned above were obtained on 7-point scales for four common hazards: aviation accidents, fires in the home,
Abstracts and Reviews automobile accidents, and stomach cancer. The survey also collected demographic data on respondents’ age, schooling, income, ..~~_ sex and race. Regressions were then conducted to relate the demographic characteristics to risk perceptions. Some strong general conclusions can be drawn. The results suggest that women, people with lower levels of schooling and income, younger people, and blacks have more dread of hazards. The exception being age-related illnesses which, not unnaturally, are feared by older people. Unlike previous literature, we cannot substantiate the argument that these groups of people are less informed about hazards and thus less accepting of them. The most likely leading explanation of the relationship between demographic factors and dread of a hazard is the perceived personal exposure to the hazard. People with greater perceived exposure to a hazard are more fearful. Keywords: perceptions, demographics. 074101 (E60, M54, B20) The health impact of major nuclear accidents: the case of Greece. ..Kollas J.G., Risk Analysis, Vol. 13, nr. 5, 1993, pp. 503-508. An assessment of the radiological consequences that would result for the population of Greece from postulated major nuclear accidents in the Kozloduy nuclear power station in Bulgaria is performed. Kozloduy lies at a distance of 225 km from the northern borders of Greece and contains six reactors, all of the Russian WWER type. The postulated accidents that are classified as level 7 accidents on the International Nuclear Event Scale, involve significant releases of radioactive materials into the environment, and widespread health and environmental effects. The analysis is performed by the MACCS code. The estimated consequences are compared to the corresponding actual impact of the Chernobyl accident in Greece. The results of the analysis indicate that, under the conservative assumptions adopted, the radiological consequences of the most severe accidents considered would be about 1.5 orders of magnitude larger than the actual radiological consequences of the Chernobyl accident. Keywords: nuclear risk, radiation. 074102 (E60, B20) Curbing the rising premiums for older policy holders in German private health insurance - a simulation study - .
253
Drees H., Milbrodt H., Bliitter der Deutschen Gesellschaft fiir Versicherungsmathematik, Vol. 22, nr. .C.. 2, 1995, pp. 393-418. z. We deal with the problem of rising premiums for older policy holders within the German private health insurance. There are several reasons for this problem: permanently increasing health costs, the “mathematical old age problem” arising through the fiction of fixed health costs, permanently steeper and steeper profiles and the declining intensity of decrement especially within the group of the older policy holders. Measures are currently examined to curb the rising premiums for older policy holders; these measures follow the example of 0 12 a VAG (German insurance supervisory law), but go beyond these regulations as concerns the extent of the used profits. They are compared to the additional implementation of dynamic models and provisional tariffs where an old age premium reduction is financed through additional premiums in younger years. Starting point is a computer simulation on the basis of the per head claims published by the association of the German private health insurance companies. For the first time, the fact that profiles become steeper and steeper is taken into account. As shown in our results, the effect of the reduction of the “extended VAG model” on the private health insurance premiums during old age is considerable, the extent of the premium reduction, however, being very largely dependent on the age position of the policy holder within the portfolio. Older policy holders who enter the group of the favoured at a stage where this group is still small profit extremely high from these measures. However, if one further develops the prevailing per head claims, the extended VAG model alone does not guarantee affordable private health insurance premiums during old age. Hence, the cost development has to be influenced or supplementary elements - like dynamic models or provisional annuities - have to be included. But even then it looks like it will be necessary in the long run to influence the costs. Even a slightly more favourable development of the per head claims leads to persistently cheaper premiums during old age. This calculation basis is therefore extremely critical. Dynamic models produce higher costs and significantly increase the start-up premiums. Therefore, suitable provisional tariffs are a preferable means of supplementing the extended VAG model. They also increase the start-up premiums, however, they do not have a negative influence on the health and administration costs. If provisional annuities are calculated pursuant to and with the calculation basis of