Risk Perception and the Economic Crisis: A Longitudinal Study of the Trajectory of Perceived Risk

• Published in: Risk analysis Vol. 32; no. 4; pp. 659 - 677
• Main Authors: Burns, William J., Peters, Ellen, Slovic, Paul
• Format: Journal Article
• Language: English
• Published: Malden, USA Blackwell Publishing Inc 01.04.2012; Blackwell Publishing Ltd
• Subjects: Business; Communication; Confidence; Economic conditions; Economic crisis; Economics; Emergency preparedness; emotion; Emotions; Fear; Finance; Financial crisis; hedonic adaptation; Income; Investments; latent growth curve; Longitudinal studies; Obama, Barack; Perception; Perceptions; Political attitudes; Presidents; Public opinion; Retirement; Risk; Risk analysis; Risk factors; Risk management; Risk perception; Risk theory; Studies; Survey analysis; Surveys; Trajectories; Treasury; U.S.A; United States > US
• ISSN: 0272-4332; 1539-6924
• DOI: 10.1111/j.1539-6924.2011.01733.x

We conducted a longitudinal survey of public response to the economic crisis to understand the trajectory of risk perception amidst an ongoing crisis. A nation‐wide panel responded to seven surveys beginning in late September 2008 at the peak of the crisis and concluded in October 2009. At least 600 respondents participated in each survey, with 413 completing all seven surveys. Our online survey focused on perceptions of risk (savings, investments, retirement, job), negative emotions toward the financial crisis (sadness, anxiety, fear, anger, worry, stress), confidence in national leaders to manage the crisis (President Obama, Congress, Treasury Secretary, business leaders), and belief in one's ability to realize personal objectives despite the crisis. We employed latent growth curve modeling to analyze change in risk perception throughout the crisis. Our results suggest that, in general, people's perceptions of risk appear to decrease most rapidly during the initial phase of a crisis and then begin to level off. Negative emotion about the crisis was the most predictive of increased risk perception, supporting the notion of risk as feelings. Belief in one's ability to realize personal objectives was also predictive. Confidence in national leaders, however, was not predictive of perceived risk. Finally, our results demonstrate that groups may experience a crisis differently depending on a combination of personal characteristics such as gender, income, numeracy, and political attitude. Risk management and communication should work in sync with these mechanisms and differences across groups.