Do we pay too much to avoid minuscule risks? Yes, according to a new study by Office of Information and Regulatory Affairs (OIRA) administrator Cass Sunstein and Harvard University economist Richard Zeckhauser. The study, “Overreaction to Fearsome Risks,” published recently in the journal Environmental and Resource Economics, finds that “in the face of a low-probability fearsome risk, people often exaggerate the benefits of preventive, risk-reducing, or ameliorative measures.” Consequently, the researchers find that “in both personal life and politics, the result is damaging overreactions to risks.” Translation: Scared people who don’t understand or care about parsing probabilities end up spending far more than is rational to avoid truly tiny risks. Worse yet, policy makers are often stampeded by frightened constituents into enacting regulations that cost far more than the benefits they offer in risk reduction. More here