Why We Under Prepare for Why We Under Prepare for HazardsHazards

Robert J. MeyerRobert J. MeyerThe Wharton SchoolThe Wharton School

University of PennsylvaniaUniversity of Pennsylvania

An Eternal Problem: Minimizing the An Eternal Problem: Minimizing the Societal Impact of Natural DisastersSocietal Impact of Natural Disasters

A modern dilemma: advanced scientific knowledge A modern dilemma: advanced scientific knowledge of the processes that generate natural disasters of the processes that generate natural disasters and means to protect against them has done little and means to protect against them has done little to reduce their damaging impact. to reduce their damaging impact.

2004 Tsunami (est. 224,000 dead); 2005 2004 Tsunami (est. 224,000 dead); 2005 Hurricane Katrina (100bn loss, 1300 dead): 2005 Hurricane Katrina (100bn loss, 1300 dead): 2005 Earthquake (Pakistan): 79,000 killed; 1970 Earthquake (Pakistan): 79,000 killed; 1970 Cyclone, Bay of Bengal: 300,000 killed; 1995 Kobe Cyclone, Bay of Bengal: 300,000 killed; 1995 Kobe Earthquake (Japan): 6,000 killed, 80bn loss.Earthquake (Japan): 6,000 killed, 80bn loss.

Why were these tragedies so bad?Why were these tragedies so bad?

In almost all cases post-event analyses In almost all cases post-event analyses suggest that the events need not have been suggest that the events need not have been as a damaging as they wereas a damaging as they were

Decision makers knew they were living in Decision makers knew they were living in risk-prone areas, knew what steps to take to risk-prone areas, knew what steps to take to mitigate losses, and, often, could afford to mitigate losses, and, often, could afford to undertake them.undertake them.

Example: New Orleans’ Close Example: New Orleans’ Close Call with Hurricane Ivan, 2004Call with Hurricane Ivan, 2004

ExampleExample September 13, 2004: Category-5 September 13, 2004: Category-5

Hurricane Ivan is near the West Coast of Hurricane Ivan is near the West Coast of Cuba heading NW into the Gulf, and 3 of Cuba heading NW into the Gulf, and 3 of 6 computer models predict a direct hit on 6 computer models predict a direct hit on New Orleans in 3 daysNew Orleans in 3 days

Likely consequence: catastropheLikely consequence: catastrophe

Mayor Nagin said he would "aggressively recommend" people evacuate, but that it would be difficult to order them to, because at least 100,000 in the city rely on public transportation and have no way to leave. Despite the potential need for emergency housing, no shelters had been opened in the city as of Tuesday night. Nagin said the city was working on setting up a shelter of "last resort" and added that the Superdome might be used, but a spokesman for the stadium said earlier Tuesday that it was not equipped as a shelter.

September 14: Mayor Orders September 14: Mayor Orders General Evacuation, but discovers General Evacuation, but discovers major flaws in evacuation systemmajor flaws in evacuation system

Good NewsGood News Ivan spares New Ivan spares New

Orleans (coastal Orleans (coastal Alabamians and Alabamians and Floridians not real Floridians not real happy, though). happy, though).

New Orleans breathes New Orleans breathes sigh of reliefsigh of relief

QuizQuiz

If you were Ray Nagin, what should you If you were Ray Nagin, what should you have learned from this close call?have learned from this close call?– a) That the city was fortunate to have averted a a) That the city was fortunate to have averted a

catastrophe, hence immediate steps should be catastrophe, hence immediate steps should be taken to remedy the evacuation problems;taken to remedy the evacuation problems;

– b) The city is safe for another 40 yearsb) The city is safe for another 40 years– c) The city is inherently luckyc) The city is inherently lucky– d) What close call?d) What close call?

One year later…One year later…

Two Months Later: WilmaTwo Months Later: Wilma

October 2005: Wilma becomes strongest October 2005: Wilma becomes strongest hurricane ever recorded in Atlantic basin, hurricane ever recorded in Atlantic basin, threatens South Floridathreatens South Florida

South Floridians ordered to stock up (for the South Floridians ordered to stock up (for the 44thth time that year) time that year)

Q: What did residents learn from their own Q: What did residents learn from their own earlier bout with Katrina and other storms?earlier bout with Katrina and other storms?

Apparently, very littleApparently, very little

So why?So why?

Ultimately, decisions to undertake mitigation are Ultimately, decisions to undertake mitigation are made by individuals for whom the best course of made by individuals for whom the best course of personal action is highly uncertainpersonal action is highly uncertain– While one may be aware of aggregate risk, how this While one may be aware of aggregate risk, how this

translates to individual circumstances is often translates to individual circumstances is often ambiguous;ambiguous;

– There is inherent uncertainty about the cost-There is inherent uncertainty about the cost-effectiveness of mitigation investments, which compete effectiveness of mitigation investments, which compete with other expenditureswith other expenditures

– The processes that allow us to make good decisions in The processes that allow us to make good decisions in most walks of life fail when applied to low-probability, most walks of life fail when applied to low-probability, high-consequence eventshigh-consequence events

The bottom line: why we under-The bottom line: why we under-prepareprepare

We have limited abilities to recall the past, We have limited abilities to recall the past, have limited abilities to foresee the future, have limited abilities to foresee the future, and make mitigation decisions by imitating and make mitigation decisions by imitating the behavior of neighbors who are equally the behavior of neighbors who are equally myopicmyopic

Biases in learning from the pastBiases in learning from the past

For most human endeavors, learning by For most human endeavors, learning by trial-and-error is an efficient way to develop trial-and-error is an efficient way to develop survival skills survival skills

The problem: when T&E processes are The problem: when T&E processes are applied to learning about mitigation in low-applied to learning about mitigation in low-probability, high-consequence, settings, it probability, high-consequence, settings, it will lead us to the wrong behaviors more will lead us to the wrong behaviors more often than the right ones.often than the right ones.

The reasonsThe reasons

One rarely sees positive benefits of One rarely sees positive benefits of investments in mitigation (most experiences investments in mitigation (most experiences are false alarms);are false alarms);

When hazards When hazards areare encountered, the encountered, the implications they hold for optimal mitigation implications they hold for optimal mitigation will tend to be ambiguouswill tend to be ambiguous

Two major consequencesTwo major consequences

Rapid extinguishing of normative mitigation Rapid extinguishing of normative mitigation behaviors; andbehaviors; and

The prolonged persistence of superstitious The prolonged persistence of superstitious beliefs about mitigationbeliefs about mitigation

Example: Rapid forgetting and Example: Rapid forgetting and the Rebuilding of Pass Christian, the Rebuilding of Pass Christian,

MS after Hurricane CamilleMS after Hurricane Camille

Richelieu Apartments,Pass Christian, Mississippi, August 1969

Same Location after Hurricane Katrina (former Pass Christian Shopping Center

Example: the flip side of recency: Example: the flip side of recency: learning learning too muchtoo much from recent from recent

disasters disasters

September 2005: Houston Braces September 2005: Houston Braces for Hurricane Ritafor Hurricane Rita

FEMA, State vow not to allow this to FEMA, State vow not to allow this to be another Katrinabe another Katrina

Action: 1.5 million Texans in Action: 1.5 million Texans in Galveston/Houston ordered to evacuate via Galveston/Houston ordered to evacuate via staged planstaged plan

Slight problemSlight problem

2.8 million, not 1.5 million, try to leave.2.8 million, not 1.5 million, try to leave. Takes up to 13 hours to drive 45 milesTakes up to 13 hours to drive 45 miles Problem exacerbated by broken down cars, Problem exacerbated by broken down cars,

need to send relief supplies to people in need to send relief supplies to people in carscars

More die during evacuation than stormMore die during evacuation than storm

How observing past outcomes How observing past outcomes can be misleadingcan be misleading

The hurricane-proof “Dome Home” The hurricane-proof “Dome Home” Pensacola Beach, FL 2003Pensacola Beach, FL 2003

The Dome Home after Ivan, The Dome Home after Ivan, September 2004September 2004

The Persistence of Mitigation The Persistence of Mitigation MythsMyths

A tornado is approaching your house. The best A tornado is approaching your house. The best way to prevent the house from suffering damage way to prevent the house from suffering damage is:is:– Close all the doors and windows to create a tight seal;Close all the doors and windows to create a tight seal;– Open a few windows to relieve pressure when the Open a few windows to relieve pressure when the

funnel passes near or over;funnel passes near or over;– Neither of these actions will have any effect on reducing Neither of these actions will have any effect on reducing

damagedamage

Opinions (95 Pennsylvanians):Opinions (95 Pennsylvanians):– Close all the doors and windows (15%)Close all the doors and windows (15%)– Open a few windows (55%);Open a few windows (55%);– Neither of these actions will have any effect on Neither of these actions will have any effect on

reducing damage (30%)reducing damage (30%)

Hurricanes in the LabHurricanes in the Lab

The Hurricane SimulationThe Hurricane Simulation

Respondents were endowed with a residence of known Respondents were endowed with a residence of known value, and were paid at the end of the simulation the value, and were paid at the end of the simulation the difference between this endowment and the cost of difference between this endowment and the cost of mitigation and storm repairs. Mitigation measures do not mitigation and storm repairs. Mitigation measures do not improve the value of the home--they only reduce storm improve the value of the home--they only reduce storm losses.losses.

At the start respondents are told their expected length of At the start respondents are told their expected length of tenure in the home and its locationtenure in the home and its location

Respondents could gather information about hurricanes, Respondents could gather information about hurricanes, mitigation, and make mitigation purchases by clicking mitigation, and make mitigation purchases by clicking control buttons in the simulationcontrol buttons in the simulation

Actual-Optimal Hurricane Mitifation by Storm Within Years

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The ExplanationThe Explanation

In the absence of an unambiguous correct In the absence of an unambiguous correct course of action, mitigation decisions were course of action, mitigation decisions were driven by short-run negative feedbackdriven by short-run negative feedback

There was no evidence of learning either There was no evidence of learning either from observing the misfortunes of others or from observing the misfortunes of others or close-call encounters—the damage had to close-call encounters—the damage had to be realbe real

In time lag effects vanished, but investments In time lag effects vanished, but investments remained well below optimum.remained well below optimum.

Biases in seeing into the futureBiases in seeing into the future

As bad as we are at learning from the past, As bad as we are at learning from the past, we seem to be worse at accurately we seem to be worse at accurately anticipating the future consequences of anticipating the future consequences of current behaviorscurrent behaviors

Key biasesKey biases

Projection bias: we have a hard time Projection bias: we have a hard time envisioning future hedonic states that are envisioning future hedonic states that are different from the one we are in;different from the one we are in;

Optimism Bias: we are prone to imagine the Optimism Bias: we are prone to imagine the are prone to the best rather than worst-case are prone to the best rather than worst-case scenarios, causing errors in protective scenarios, causing errors in protective planningplanning

Examples: New Orleans post Examples: New Orleans post 2004 Hurricane planning, failure 2004 Hurricane planning, failure

to evacuate in the face of to evacuate in the face of Hurricane Katrina Hurricane Katrina

Optimistic Planning and the Optimistic Planning and the 1935 Labor Day Hurricane1935 Labor Day Hurricane

September 2,1935 (Labor Day)September 2,1935 (Labor Day) 675 WWI vets are in make-shift camps in the Fla 675 WWI vets are in make-shift camps in the Fla

Keys, working to build a highway to Key WestKeys, working to build a highway to Key West

7 AM: Weather Bureau warns there is a CHANCE 7 AM: Weather Bureau warns there is a CHANCE that a hurricane MIGHT affect the area that night that a hurricane MIGHT affect the area that night or early Tuesday—but it looks to be heading to or early Tuesday—but it looks to be heading to Cuba Cuba

The decisionThe decision The only way to evacuate the Vets is by a train The only way to evacuate the Vets is by a train

from Miamifrom Miami No train had been scheduled because of the No train had been scheduled because of the

holiday; a special one would have to be holiday; a special one would have to be ordered.ordered.

the FERA supervisor in Jacksonville must the FERA supervisor in Jacksonville must decide whether and when to order an decide whether and when to order an evacuationevacuation

The DecisionThe Decision

The calculation: it usually takes 2.5 hours to The calculation: it usually takes 2.5 hours to ready a train and reach the campsready a train and reach the camps

Hence, no need for an immediate Hence, no need for an immediate evacuation; if the threat looks real come evacuation; if the threat looks real come noon/early afternoon, send the train (better noon/early afternoon, send the train (better be safe than sorry). be safe than sorry).

What happenedWhat happened

1:30 PM: Weather service revises 1:30 PM: Weather service revises forecast…gales to begin soon, hurricane forecast…gales to begin soon, hurricane conditions late that nightconditions late that night

2PM: Evacuation Train ordered2PM: Evacuation Train ordered Problem: Cars are in Miami, Engine in Problem: Cars are in Miami, Engine in

HomesteadHomestead Engine is Pointed in the Wrong DirectionEngine is Pointed in the Wrong Direction Train does not leave Homestead until 5PMTrain does not leave Homestead until 5PM

5 PM

7PM

8PM; no further progress

10 PM; Landfall Long Key;

200+ mph 26.35”

Morning: 452 Dead; 279 VFW Camp Workers

Biases in leaning from OthersBiases in leaning from Others

Given the tremendous uncertainty that Given the tremendous uncertainty that surrounds mitigation decisions, many surrounds mitigation decisions, many homeowners tend to make decisions by homeowners tend to make decisions by imitating the decisions of others or following imitating the decisions of others or following social normssocial norms

The problem, of course, is that such a The problem, of course, is that such a heuristic works only if the norms are rational heuristic works only if the norms are rational

Example: the Wharton Example: the Wharton Earthquake SimulationsEarthquake Simulations

ProcedureProcedure

Participants played a series of real-time games in Participants played a series of real-time games in which they lived with other players in a which they lived with other players in a hypothetical country prone to earthquakes.hypothetical country prone to earthquakes.

They could make investments in permanent They could make investments in permanent improvements that reduced damage from quakesimprovements that reduced damage from quakes

They were paid based on the initial value of their They were paid based on the initial value of their home plus earnings minus earthquake damage home plus earnings minus earthquake damage and mitigation investmentsand mitigation investments

The Screen LayoutThe Screen Layout

The ManipulationsThe Manipulations

For half of all communities mitigation was For half of all communities mitigation was ineffective (optimal investment=0), for half it was ineffective (optimal investment=0), for half it was highly effective (optimal=100)highly effective (optimal=100)

Ss played 3 blocks of 10-minute gamesSs played 3 blocks of 10-minute games After 1 warm up game, 1 player in each After 1 warm up game, 1 player in each

community was secretly informed of the true community was secretly informed of the true effectiveness. Other players knew that the effectiveness. Other players knew that the community had an informed player, but his/her community had an informed player, but his/her identity was not revealed identity was not revealed

Actual Protection by Game When Optimal = 0

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Informed uninformed

So why don’t we prepare?So why don’t we prepare?

As human decision makers we have As human decision makers we have evolved to be quite skilled at learning quickly evolved to be quite skilled at learning quickly from frequent, unambiguous, feedback, and from frequent, unambiguous, feedback, and planning for the short termplanning for the short term

Problem: effective mitigation decisions Problem: effective mitigation decisions requires skills that are just the opposite to requires skills that are just the opposite to that; for example, a willingness to that; for example, a willingness to persistently invest in costly actions that do persistently invest in costly actions that do not have an observable positive payoffnot have an observable positive payoff

Solutions: the obviousSolutions: the obvious

Legislation: policies need to be put into Legislation: policies need to be put into place that protect policy makers and place that protect policy makers and residents from themselves; e.g. through residents from themselves; e.g. through building codes, long-term commitments to building codes, long-term commitments to funding, required hazard-response plansfunding, required hazard-response plans

Education: residents need to be taught not Education: residents need to be taught not just about hazard risks, but also trained to just about hazard risks, but also trained to be better long-term decision makersbe better long-term decision makers

Solutions, the less obviousSolutions, the less obvious

Problem: forming effective legislation and Problem: forming effective legislation and education programs requires us to know much education programs requires us to know much more than we currently do about human decision more than we currently do about human decision making in low-probability, high-consequence making in low-probability, high-consequence settings. While we know much about the physical settings. While we know much about the physical science of hazards, we know much less about the science of hazards, we know much less about the associated psychological science. Bridging this associated psychological science. Bridging this gap should be a major goal of research funding in gap should be a major goal of research funding in the natural hazards area in the years to come.the natural hazards area in the years to come.