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we're here today with Wharton professors Howard kther and Robert Meyer to talk
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about their new book the ostrich Paradox why we under prepare for disasters Howard and Robert thanks for being with
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us thanks so much now I first wanted to ask you about the title of the book because like most people I assumed what
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it meant was that we should we should not be like ostriches that we should not keep our heads in the sand when it comes
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to disasters but actually it turns out that that's not quite the case so could
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you tell us yeah absolutely the um uh that what motivated the book because we were very much interested in writing
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about uh why it is that uh we can't seem to get a hold on disasters that that
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even though scientific abilities to forecast hurricanes and so forth has really grown considerably over the years
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that hasn't really been matched with it with any sort of a noticeable decrease
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in the uh uh in the costs both in terms of lives and monetary losses from uh from natural disasters or man-made
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disasters and and often the the reason that that's given is whenever that happens we say that well people are
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putting their heads in the sand they're they're ostriches and uh and that's sort
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of the the old cartoon notion of what an ostrich is when thread is coming a lion
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is coming they dig their head in the sand and sort of pretend it doesn't exist um and it turns out that actually
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that that's uh ostriches have been given a a severe bum wrap for that over the
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years because actually ostriches are incredibly good at dealing with risk uh they have enormous limitations they
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can't fly but the but the Nature has allowed them to overcome that by having
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enormous ground speed and have all sorts of risk of avoidance strategies so then
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occurred to us that actually therein is sort of like might be a a key to the way
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in which we can get people to be better uh at preparing for risk rather than being um less like ostriches actually to
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be more like ostriches to first start off and say what are the limitations that we have what are the psychological
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limitations that prevent us from being better and preparing for disasters and once we understand what those are are
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think about ways in which we can better adapt to those limitations so we're more
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like ostriches rather than less hence the Paradox yeah and the only point I'd
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want to add to Bob's comment is uh that I learned a bit about ostriches just in
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the context of the discussion that the two of us had together in terms of what they did and also that we do bury our
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heads in the sand often and so in some sense we felt that in a way using the ostrich as the as a way of an analogy to
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kind of the things that we do we might be in a position for people to pay attention and I think the real challenge
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in any of this area is for people to pay attention before something happen rather than afterwards and ostriches are
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very good at doing that and we hope that human beings can do a better job than they have up until now right now I mean
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the book actually starts with a really interesting example of galvaston Texas it was two I believe it was hurricanes
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hundreds of years apart maybe almost but the same reaction even though for the second time technology had Advanced
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significantly science had Advanced significantly Communications had Advanced significantly and yet there was
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still this same under response to the disaster and I wondered I guess the book is
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actually full of stories like this and was there one in particular that inspired the book well actually let me
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jump it there because for me the thing that inspired is actually a story which is not in the book okay and uh and it
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was like in I think it was 2008 I was um visiting New Orleans and I decided uh to
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take a drive along the Mississippi Gulf Coast and as I was driving along near the town of past Christian Mississippi
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which was an area which had been devastated by Hurricane Katrina I was sort of noticing how how quickly the
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place had recovered and there was what there was just a lot of nice grass fields and I was walking along I was
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driving along the road and I noticed that in one of the fields was a an ATM machine that was just sitting up by
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itself and uh and I and I looked at that and I pulled over and I said what's an
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ATM machine doing out in the middle of a field so I kind of walked up to it and I
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looked at it and then I began looking around and then I discovered afterwards that what what this was was used to be a
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shopping center that used to be right on the coast that had been completely destroyed by Hurricane Katrina and the
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only thing that was left was uh the the the the ATM machine and then I kind of did I was interested in this this how
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this happened and then the interesting thing was it turned out that this shopping center was built on the exact
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same spot that in 1969 a condominium complex used to be there and 23 people died when the condominium complex was
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blown away by a hurricane and and so basically so I contacted the the the person who was uh who own the land of
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the shopping center and I said did you know that this used to be have this horrible history and they said yeah it'
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been but it been so many years since there had been a storm I didn't we didn't think it was in under much risk
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and so then I said well what do you plan to do with the property he says well we're thinking about us selling it and
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hope to put build up a condominium complex here again and so I was sitting there and I was thinking there's got to
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be a story there there there there has to be uh uh you know what why is it that we kind of keep uh don't learn from
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experience why is it that we're not better at thinking had in terms of what the the consequences are of of uh of of
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threats like this and so what are all the different types of psychological factors that that caus us to be so poor
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at preparing for disasters I think that U just to follow up on on a story in the
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book that actually did started off is a story of Glenda Moore who uh was in a position where she had to figure out
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what decision she was going to make after Hurricane Sandy and I think all of us were very very cognizant of the
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challenges we face after a storm occurs in in the sense that we know there are things we should do and we are things
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that we might not do but we don't really know them as well as we should and I
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think that Glenda's first concern was to be with her husband who had actually
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left and she and was in Brooklyn and made a set of decisions without necessarily carefully thinking them out
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and our concern I think when uh with respect to pointing this out to others is that to a large extent we react to
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two situations at the moment without necessarily doing an analysis of all of the possible dangers and the
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communication mechanisms are sometimes good but we sometimes don't hear them
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and so she actually made some decisions to leave that actually resulted in her losing her children and as a result of
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that uh there was a whole set of media attention given to that and our feeling was it was a way to start the book to
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point out the fact that we would like everyone to reflect on what could happen after a disaster then and do some steps
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beforehand to prepare and also to listen to the kinds of things that one is hearing and try to get the right kind of
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information so one doesn't do the things that could result in tragedy and now you
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actually outlined six different biases that may be at play that may lead to some of this under preparation for
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disasters and I somewhere in the book you had mentioned or maybe it was in this other interview that came with my
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book about that perhaps the most dangerous one of these six might be optimism which I thought was very
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interesting just because we usually think of that as a good thing yeah yeah yeah no absolutely I think in fact it is
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the good thing to have in life I mean uh you know we've been fortunately endowed
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with an optimistic Outlook uh uh and so forth the problem is is that in fact I think this is true with almost with all
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of the biases that we talk about in the book these are things which uh which the
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reason why we have them is they serve a good functional purpose and most of the time and most the the decisions we face
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on a day-to-day basis they basically serve us well and and um however it's also the case that when when you
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suddenly now we're in a situation of facing very very rare events things that
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we decisions we don't have to make on a day-to-day basis uh that's where when
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you start applying these same heris sixs all of a sudden all sorts of stuff goes
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wrong and optimism is a great case of that um you know it is good to look on the bright side of life and all of that
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sort of thing however when uh when you're talking about something that might happen to you that might mean the
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end of your life uh then being optimistic is not necessarily the best thing to do and and uh and one of the
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things we talk about is sort of you know what are the different ways in which people become erroneously optimistic in
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a way that's harmful and I think one of the things with optimism is that we try
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to find ways to sort of defend our optimism and so we think about a a n a disaster a flood or a hurricane we don't
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really want to think about those disasters we're optimistic because we are living in an area that we say this
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is a great place for us to live and we want to sort of keep that image alive and so we say well let's you know this
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is so low the chances of anything happening are so low that we're not going to really think about it it won't
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happen to us it may happen to others it won't happen to us it's below we we use
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the Expression our threshold level of concern we're not going to worry so we
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keep that optimistic bias in the sense of trying to avoid having to think about things that we probably should be
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thinking about beforehand and our whole idea in bringing that up along with the four or five other we have six biases uh
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is to say they're all connected in some sense uh and in one way or another we
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have to try to figure out ways to let people know that these are things that we all do and we all have our own
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personal examples and then we can think about ways to improve the decisions by trying to avoid them in the future and
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now your method of improving this what you lay out in the book is called the behavior risk audit and this sort of
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this involves looking at each of these risks and kind of turning I mean each of these biases and kind of turning them on
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their heads and seeing how can we create polies that actually address these biases and maybe get around them can you
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talk a little bit about how people could do this well let let me illustrate with
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one and and Bob May pick one another one um myopia is one of the biases that we have people are have very very short
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term we all have short-term Horizons we want to get immediate returns in some sense and if there are things that we
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can do for the long term we often find they are very prohibitively expensive they're costly we can't really do them
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let's take an example of having to make our house safer against uh Hurricane
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Sandy or flood uh or hurricane uh there's a lot of cost to doing that you could elevate your house but that's very
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costly you could maybe flood proof or you could do a set of things and people will say well look what are the benefits
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that I'm going to get from that in the next period And so they'll be very
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reluctant to put in the money because they say the benefits we have to get are going to be very short run and they're
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right I mean in some sense if you're going to get a short run benefit like a
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reduction in your insurance premium uh you'll say well I'm not going to get
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enough to pay for that expense so we would recommend that instead of thinking about just the long term with respect to
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this there are two things that one can do one is you might give a person a loan to help them out and spread the cost
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over time and the other thing to deal with the it won't happen to me instead
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of saying it's going to be a one in a 100 chance of a flood occurring next year which is kind of what the
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probability is stretch the time and say to people think about the fact that there might be a a hurricane in the next
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30 years and that likelihood is greater than one in four or one in five and then
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people will think about the long term and maybe decide that they can take some action yeah another example another one
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of the biases we talk about is uh is simplification and the the idea there is is that most people don't like to
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consider lots of different factors when making decisions and uh and one feature of this is a thing called The Single
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Action bias and what it is is that when you're faced with the problem uh you
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basic as soon as you take like one action to try to solve it there's a tendency for your brain to go good there
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was the problem I took some action problem solved and uh so in a lot of walks of life that's kind of an okay
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thing to do but think about in the context of of preparing for natural disasters when in fact there's large
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numbers of things that you need to do or or you're trying to build a safer house
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in which in order to make the house structurally sound there's lots of different things that you have to do
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well often kind of historically the way in which uh agencies like uh uh Noah and
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and FEMA and whatnot have encouraged people to prepare for disasters is to give them checklists and the checklist
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will have 60 items on them and you say make sure you do this with your dog make sure you do this and so forth well the
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single action bias will say people are going to ignore most of those things but they are going to see the list they are
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going to be aware that there's a threat the problem is is that they're going to
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go down this list randomly and take care of the dog or whatever and once they've
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done that that's the end of the list and they feel that they're sort of prepared
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for the disaster when and they're they're really not so so one of the remedies for that is to say now that we
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know people simplify and they tend to focus on one action what an agency needs to do is don't give them a massive
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checklist say if you're going to do one thing here's the one thing to do okay
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and once you've done that here's the second thing to do and you have to kind
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of walk people through that and that's going to be a much more effective way of
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of of getting people to prepare now do you know of examples of agencies or governments or companies that are that
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are doing things like this that have developed policies like this or do we do they all need to get a copy of the book
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they got to get a copy of the book they definitely have to get but I'll give one
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example and and related to what I said a few moments ago the Federal Emergency Management agency is very concerned with
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communicating risk and they have actually changed the way they're presenting information on the flood
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Hazard they used to talk about a one in a 100e flood or return period they're
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now telling people think about the next 30 years when you and what could happen to you and you should be considering
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buying insurance for next year even though uh you are thinking about the fact that it's low probability it could
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be greater than such and such for one and four for a disaster to occur so they are actually trying to take that
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seriously we don't but they have to do this in such a way that they communicate
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so people at least read that which of course is a challenge and of itself I mean because I would think with that
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it's like they're taking it from 100 to 30 actually takes it back within the
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realm of their lifetime so they're doing it for them not for the people who are
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going to live there in the future that's exactly right they want to get a reasonable time period but if they said
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and and they and and when they do that they of course stretch the probability and make it a lot higher than it would
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occur next year now could a family or an individual use this Behavior risk AIT to
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help themselves prepare for disasters or is it more for policy makers ERS or companies no I think it's absolutely can
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be used for for individual households because I think that often it's the case
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that that often it's the case the companies themselves at a very very high level are actually fairly good at
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thinking through all the details and having very well-developed um you know risk avoidance plans or something like
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that for example a a a utility compan has actually tend to be very good at this sort of thing on the other hand a
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lot of the kind what with this book I think is a little bit more targeted at is uh organizations which aren't
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necessarily all that experts in terms of R risk preparation and so for any given
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family uh you need to sit down and think through well well how is it that we as a
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family are thinking about risk and these biases actually even more so apply there
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um and Howard was given the example of start that started out the book about uh the Glend deore family where a woman um
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uh hastily put her children into a van and then took them down and uh in front of the and they she lost the children
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and in a Hy in a Hast evacuation I that you know we would like to think that this is a book which kind can help
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households like that um make sure that those events never occur and what it does is it says look you know when
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you're faced with disasters these are the kind of mistakes that you're likely
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to make and it's not because there's something wrong with you you're just
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human and these are these are hard grain hardwired biases that we have and once we understand what those are you can
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kind of anticipate the kind of mistakes you're going to make and so and then
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that's the first step in trying to avoid them here's what our hope is there are a
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series of stories that are graphic and people do react to graphic stories in a way that they don't react to just the
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facts or whatever and and our hope is that people will read these stories and recognize that it can happen to them in
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some way and it has happened to others and that they'll pay attention to the
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very last part of the book on here ways to improve and then we would like to use
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one of our biases that we hope makes this book more than just one person reading it and that's the her effect and
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we hope that there will be somehow a notion that people will see this and say you know this is something I'd like to
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talk to a few other people about and it isn't just our situation it may be others and I hope it becomes a topic
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which generally is not a topic of conversation of the fact that we have these kinds of biases we have these
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things and we all think of our own sets of activities that might reflect that and we have our own personal ones which
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we can experience and that that becomes really more of a social Norm that this is something that people should
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recognize they have and there's a tendency with with the kinds of events we're talking about for people not to
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want to pay attention and our hope is that the stories that we tell here will resonate enough so that people will want
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to actually think about them I mean it seems like we don't you know we hear about hurricanes when they're a day away
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or two days away or maybe in the immediate aftermath but then we don't hear about them again until the next one
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comes along and you talk a lot about those types of events in the book but you also talk about more long range
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events specifically about about climate change which is not something that the be the worst part of it's not going to
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happen tomorrow or next week next year maybe even not in the next decade but how does the behavior risk audit apply
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to something like that where it's more of a long-term broader risk well this is
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a real Challenge and I think we recognize it's a challenge that we're facing right now because climate change
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is not necessarily being discussed in a way that I think we would like to see it
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discussed it is a critical problem um and Miami where Bob has lived there for a while and can and can talk about that
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directly is facing major problems with sea level possible sea level rise and people may not be paying attention right
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now and I think what we would say I and a way to say it is first of all construct some scenarios that you begin
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to see what might happen and think about how you can take some steps now to avoid
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those scenarios and also to think about the fact that it isn't just yourselves
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but there's future Generations at stake and what is going to be what is this
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going to do to my children and my great grandchildren and how can we take some steps and try to make the case to
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recognize that there's a tendency to say this is not going to happen and it won't
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happen necessarily tomorrow but there has to be planning and it isn't just for
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the individuals it's for communities and that's why I point out Miami being one
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example of that uh yeah that as Howard said I think long run risk is very difficult uh and particularly if it's
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the case of let's say if you're living in in any Coastal area you're worried
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about SE level rise and you say well scientists are forecasting that in 60 to 70 years this area that you're living in
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is going to be underwater uh well that's I'm not going to be living there in 607
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years so why should I particularly care about that and you what how do I justify
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that and this is particularly the case for communities who are thinking about doing things like raising taxes and bond
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issues to put up Public Works projects to prevent sea level rise when the people who are voting for them are going
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to have to pay these taxes aren't going to be the ones that are actually going
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to be benefiting from it and so I I think that that people might understand well maybe we need to take care of it
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but maybe we should just do this next year okay that uh this to put off yeah it's it's easy to put off because
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nothing's going to change that much and so so of course what happens is you keep
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putting it off till the next year and it never never gets done so some of the things we we were kind of thinking about
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within the book are what are ways in which you can kind of get people to take uh safe actions or have a culture of
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safety in a situation where they don't have to they're not the uncertainty is
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actually not is on taking risk rather than than not taking risk so for example um normally it's the case of you have
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your your city budget and one of the light items should be should we put multi-million dollars into a pumping
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system okay and that's an add-on and then you have to think through is this a
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good use of the money now well what if it was the case that every year just is a standard starting point in the in the
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in the community budget that there's money set aside for infrastructure improvements but then that can be
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removed so all of a sudden then the discussion is uh do we want to not take a safe action this year or not and then
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that might be just enough to basically keep some of those items still on the budget which they might have might have
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otherwise been removed and the hope is through those little sorts of steps that might we get a little bit closer at
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dealing with some of these these extremely difficult Long Run problems and you could couple just what Bob is
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saying with the notion of let's not make make sure we don't have the cost
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immediately on top of us having a long-term loan so that you do spread it over a number of years will make it more
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attractive and then if you can show that there are benefits that are going to occur even in the short run that maybe
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property vales will go up maybe people will want to move into the area and you can sell your home a little more easily
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by the fact that one recognizes the community is taking steps now to avoid this problem that might be really
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serious 20 or 30 years from now and now would be a lot less serious and I think those are problems facing coastal cities
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again bringing up Miami that really has to be concerned about what is going to happen to the property values of their
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homes all of a sudden when people say we're not really taking the steps and now we are seeing that this is going to
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be a major problem so I think if we can combine these things with economic incentives with the default option that
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Bob mentioned and which is one of our Notions is if you don't do this the fact
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is you have to say I'm not going to do this rather than I'm going to do this
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and also to recognize one of the challenges and Bob brought it up very directly on the political process we
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have a little acronym that we occasionally use and I'll use it right now uh Nim not in my term of office if we can
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avoid that avoid the notion of having expended and recognize that there are benefits of being doing this in my term
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of office rather than saying it's not in my term of office then I think we have a
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chance of at least getting people to pay attention now what about different kinds
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of risk like political risks I some of the things that I read in the book really reminded me a little bit of some
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of the things that you know you heard heard people in the UK say around the time of brexit that oh this won't happen
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it won't pass or even around the time of the election that I feel like there was
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maybe some myopia or or optimism at play a little bit there do I mean do you think that the principles in the book
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can apply to different types of risk other than natural disasters or environmental risk well uh I mean we
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haven't thought explicitly about brexit uh in terms of that or and use an example but I think there is a a notion
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here that the of a feeling that people may not really necessarily appreciate all the elements of a particular problem
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I think that's what I would want to use and I think we can say about brexit and
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I think we can say about the election that occurred that there was a degree of optimism by people who felt that they
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really didn't have to be concerned about necessarily voting in a particular way
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on the basis of feeling that this was a foregone conclusion that things were going to work out that way and so in
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that sense we come back to the optimism bias in terms of what one hopes will happen but may not actually happen yeah
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and I I certainly you can go through those biases and they can provide kind of an explanation for why maybe a lot of
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people were very surprised by the uh uh the the uh the last election or alternative looking at half you know
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half the country was not at all surprised and the other half was extremely surprised and and I think that
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the part that was extremely surprised was influenced by things like herd think uh they went around and the people that
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they talked to were people had their same values that they did and they became under the belief that this is the
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way the world is and uh and and and so on and so on and you know simplification there's a tendency to to not look
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broadly and looking for evidence that maybe there are people out there who don't think like you do and and when you
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take all these things together all of a sudden there's this group think which in
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many cases may have led for a lot of people who were for example Clinton supporters to feel they didn't need to
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vote on and so forth and it's such a foregone conclusion so Howard and Robert
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thanks for being with us good to be here yeah glad to be here thanks [Music] [Music]