Risk is one of the most powerful concepts there is for understanding how the world works.
Risk involves any kind of benefit or cost, economic or not, involving human mortality and morbidity, ecological quality, jobs, social justice, aesthetic impacts such as visibility, noise and odors, impacts to historical or cultural sites, degradation of open space, biodiversity loss--indeed anything anyone cares about or values.
Risk also involves uncertainty and incomplete control. As in our inability to know perfectly or control the amount of carbon in the atmosphere, toxins in air and groundwater, transportation safety, pesticide exposure to farm workers, terrorist attacks, smoking hazard, technological accidents, natural disasters, birth and aging. All these are understood using means ranging from actuarial tables, engineering and scientific models, political theories, medical lore, epidemiological surveys, religious dogma, and casual observation.
Hence risk is about the plurality of values found in society and the plurality of means we have for understanding how the world works.
The modern idea of risk updates ancient concepts of pollution, contagion and taboos. In risk analysis, uncertainty in knowledge is dealt with using probability and statistics. Some but not all uncertainty is well-treated using these methods. The modern study of risk perception helps explain why some risks seem more dangerous than others based on factors such as media coverage, our ability to control the risk, how well the risk is understood scientifically. However, all risk is ultimately "perceived" in the sense that there's no single means for distinguishing actual from phantom risk. This is why many risk controversies become battles over expert knowledge.
Following are three ways of thinking about risk. All should play a role in understanding decisions involving risk.
Risk analysis involves the quantification of risk into metrics such as likelihoods of death or sickness due to some hazard or condition, the estimated extent of ecological damage or improvement, numbers of jobs gained or lost, likelihood of earthquakes at certain places or times, expected severity and number of accidents of various kinds, and so forth. Such quantification can involve the modeling of causes and effects, or codify statistical regularities whose sources are largely unknown.
There is no single method of risk analysis. Usually each kind of risk demands its own domain-specific understanding, so that the earthquake risk analyst has little in common with the AIDS contagion researcher.
Risk perception refers to people's views of a risk based mostly on their unreflective views. Many public controversies are thought to be driven more by facile perceptions than reasoned understanding. At the same time, powerful corporations and government agencies often refuse to deal objectively themselves with risks, and force their own perceptions on politicians, citizens and decision-makers. Psychologists have studied the factors driving the perception of risk. Decision Research is a valuable source on risk perception.
While providing many insights into how people judge risk on an intuitive basis, many researchers found that they could not isolate their research from the broader political contexts in which risk controversies occur.
Risk interpretation is the overall understanding of a risk in terms of its scientific, psychological, political, economic and cultural roles. The understanding of any risk, such as AIDS, pesticides, climate change, water and air pollution, transportation safety, terrorism, occupational hazards, biodiversity loss, or sprawl, can readily turn into a analysis of all the elements of society, from how the risk is known to who benefits and pays through what economic and social mechanisms.