We humans are horrible at judging relative risk.

I've found fear, risk and our inability to judge it interesting ever since the days after 9/11. People…and the country…did crazy things in reaction to a threat whose statistical chance of death or injury was infinitesimal. The same behavior was apparent when I was in Washington, DC, during the Beltway Sniper Attacks and again in the Spring of 2003 during the SARS epidemic in China.

During SARS, long after it had become apparent that the disease wasn't spreading quickly and didn't have a high fatality rate, people were still panicking and fleeing the country. The very same people who days before were happy cruising the most dangerous roads in the world without seat belts in taxicabs of questionable build quality were suddenly scared to death of a disease that was doing less damage than the flu does in one month.

Seeing high risk where there is little is a problem. It can cost us money, time, missed opportunities and even freedom.

Two wars and the intelligence programs at the heart of the Snowden NSA leaks grew out of the judgement of the risk posed by terrorism post-9/11.

June 10's EconTalk Podcast Schneier on Power, the Internet, and Security addresses the issue of misjudging risk and also what it means to have power on the Internet and the role of it might play in maintaining security. It is an hour well spent.

My favorite part was what Scheiner has to say about risk:

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We accept the risk of getting in a car. It's really hard to find something where driving there isn't the most dangerous part of the activity. Maybe sky diving. By far the taxi ride to the airport is the most dangerous part of a plane ride. The drive to the marathon is the most dangerous part of the day. So we are able to accept risks. We tend to accept risks that are normal parts of our life. Terrorism is rare and spectacular; plane crashes are rare and spectacular. So we over-exaggerate them. The proper response is to accept that life entails risk. And that's okay. That's not bad; that's not a failing; that's not something to fix. That is part of being in the world. For many years in our country we have recognized that the price of liberty is the possibility of crime. We deliberately reduce police power because we have a better society because of it, even though the occasional criminal gets through. Those sorts of tradeoffs, those sorts of acceptances, become harder as we live in a world where risk systematically gets removed. Where medical science, where product safety--where all of these things reduce risk, suddenly we look at our residual risk and we are aghast. What do you mean, we haven't fixed terrorism? We have warning signs on ladders, for heaven's sake. Right? We don't allow children to swim in pools unattended any more. We know better. What do you mean we can't fix terrorism? Go fix it. That's a perfectly reasonable reaction in a society that has just gotten rid of risk after risk after risk. Here's another one; just get rid of it. Can't I take a medication to get rid of this risk like I do with all the other ones? We need technology to save us

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Objectively judging risk is difficult. We've evolved to fear risk. And it's in our nature to prioritize visible risks, no matter how small, over much higher risks that we've become used to. It's hard to fight against nature.

When judging risks in my own life, I like to look at statistical probabilities and worst case scenarios. In most cases, the worst case scenario is really not that bad. When the worst case scenario is something like death, the statistically probability is almost always lower than risks I'm already comfortable taking. (like driving a car)

How do you judge risk in your own life?