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Risk Compensation & The Peltzman Effect

JonesPosted by Anthony G. Jones, R.N., COHN

While watching television several months ago I came across an author promoting his book.  As a safety person, I immediately took note as he was directly speaking about safety.  The author was Greg Ip, and the title of the book was “FOOLPROOF: Why Safety Can Be Dangerous and How Danger Makes Us Safe.” I was so intrigued by the subject matter I immediately ordered the book.    

In the discussion and subsequent reading of his book, the concept of risk compensation was set forth. For the sake of brevity, I went to the internet for a more concise description.  Sometimes we focus on, and address, the “hard science” of safety such as rules, regulations, and procedures. But that can lead to neglecting the “soft science” of safety - human behavior.  After all, safety is a “people problem.”  Unsafe acts are a more common injury cause than unsafe conditions.

According to Wikipedia:

Risk compensation is a theory which suggests that people typically adjust their behavior in response to the perceived level of risk, becoming more careful where they sense greater risk and less careful if they feel more protected. Although usually small in comparison to the fundamental benefits of safety interventions, it may result in a lower net benefit than expected.

The reduction of predicted benefit from regulations that intend to increase safety is sometimes referred to as the Peltzman Effect in recognition of Sam Peltzman, a professor of economics at the University of Chicago Booth School of Business.

“People feel safe, and the feeling of safety allowed danger to reemerge, often hidden from view… The more vivid our sense of danger the greater care we take,” says Greg Ip.

Clearly, we can’t afford to let our guard down simply because we have made things “safer.” As we focus in on better safety equipment, procedures, engineering controls, and personal protective equipment we cannot lose sight of the human behavioral aspect.  Ask yourself, are my employees using equipment correctly and following procedures effectively?  Is proper use allowing safety equipment, procedures, and PPE to work as intended to eliminate accidents?

The real danger appears to be complacency.  If a worker senses no danger, then unnecessary risks may be taken.  Often this theory is used as an excuse to limit safety steps or equipment.  But that is counterproductive.  Safety initiatives are beneficial and do provide protection for those employees who have become complacent.  Left unchecked, complacency will set in regardless of any other safety elements present.  So it is far better to address hazards and implement controls than to hope the employees will be more careful if there is more hazard.  Here are some suggestions to avoid complacency:

  • Remind staff during training and tool box talks the possible consequences of pushing the envelope, or walking too close to the edge, so to speak.
  • Attempt to change a person’s behavior to further enhance safety performance, rather than solely relying on equipment and procedures.
  • Observe employees doing their jobs. Are they demonstrating safe behaviors, with safety equipment and procedures in place? Do not assume because all guards and other controls are in place that they are being used correctly.
  • Are effective accountability policies in place?

Focusing safety efforts on behavior will lead to fewer unsafe acts, fewer injuries, and more productive workplaces.  Risk compensation is real, but with proper supervision the compensation and complacency can be kept to a minimum and safety systems will work as designed.   

Comments

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Lori Carrigan

Excellent Blog post, Tony. Thanks!

Tim McGinley

Nice post Tony, thanks. I am increasingly aware of this as I work with younger people entering the work force. The engineered safety features they will operate were not present when I was trained on some tools. The potential for injury isn't as obvious......

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