Availability Heuristics and Anecdote-driven Environmental Legislation

In the article A Behavioural Approach to Economics and Law, Jolls, Sunstein and Thaler (1988, 1518-1521) discuss the role of availability heuristics in leading to environmental over-regulation.

Availability heuristics indicates the systematic overestimation of the likelihood of an event when instances of that event materializing come easily to mind. Two main factors affect how easily an event comes to mind: its observed frequency and its salience. Salience will be greater the more recently the event materialized and the more intense was its media coverage.

Joss et al. (1998) argue that when the probability of an environmental harm is judged inaccurately due to the availability heuristics, legislation will tend to become anecdote-driven and may lead to over-regulation of more easily available environmental hazards while others less available may end up being under-regulated.

As an example of anecdote-driven regulation, the authors take the Superfund legislation. Superfund legislation, they argue, is better explained by the public pressure determined by the availability heuristics rather than than by the conventional economic theory of interest groups. The issue of abandoned hazardous waste dumps had become highly salient following the active media coverage in 1978-1980 of the Love Canal case (a case of leaks of chemical waste into the Canal between 1943 and 1952). High salience led to an overestimation by the public of the environmental hazard posed by abandoned hazardous waste dumps and led to intense public concern and pressure for legislative intervention.

Reference

Jolls, Christine, Sunstein, Cass R., and Thaler Richard (1998) A Behavioural Approach to Economics and Law, Stanford Law Review 50: 1471- 1550.

Available from here.

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