Perception Costs and NIMBY

Public risk perceptions often result in NIMBY ("not-in-my-backyard") problems that have brought policy processes to screeching halts. These results are due to what we call the "perception costs" associated with alterations in risk. In this paper, the logic of the relationship between perception costs and NIMBY is presented. One interesting insight is that disagreements between experts and the lay public arise because each focuses upon different dimensions of risk. Experts typically stick to the best historical estimates of accident probabilities, while the public is concerned with risk-adjusted costs associated with such adverse outcomes. It is the challenge of policy making to choose the correct context. As an example of the usefulness of perception cost analysis, remedial action alternatives concerning radioactive waste transportation are analyzed. The magnitude of the perception costs associated with transporting such waste is found to vary dramatically across the alternatives under consideration. Further, the magnitude of these costs easily are large enough to fuel a NIMBY problem. In each of the many roles of the policy analyst, the uses of perception cost estimates are discussed with an eye toward ameliorating NIMBY problems.