Risk perceptions & decision-making in the water industry

© 2019 Anna KosovacWater shortage issues as a result of drought and population increases have been documented frequently in Australia. Decisions that planners and practitioners make in the future water security arena are imperative in ensuring the viability of population growth and agriculture in Australia. This research considers the decision-making of these practitioners to understand whether these decisions are made objectively, or have bias attached to them. This transparency is vital in considering that these individuals effectively make decisions using public funds, on behalf of many, including future generations. Much of decision-making in the water sector is predominantly centred on risk assessment outcomes. This applies particularly in the case of options assessments, where many differing proposals are put forward to answer a problem or achieve a particular strategy. The water sector in Melbourne, Australia was assessed in detail in this study to shed light on these approaches. Current risk assessment practices within the water sector in Melbourne were analysed, across four water authorities. All of their risk approaches are similar in nature, as they are required to adhere to the standard ISO31000, therefore taking on a technical approach in risk measurement by way of risk matrices. This research considered these risk practices to understand whether they are effective in ensuring an objective outcome (i.e. regardless of the practitioner undertaking the risk assessment, the risk rating- low, medium, high or extreme- stays the same.) In this study, 77 participants were surveyed from four Melbourne water authorities. They were provided with seven fictional water projects (four that are familiar, three that are unfamiliar) and asked to undertake a risk assessment upon each. The scores obtained varied drastically between individuals, not only across all authorities but also amongst those assessors within each organisation. Results indicate that the current risk assessment practices employed in Melbourne water authorities cannot be considered to be objective. To understand the variation in the scores between decision-makers, other risk theories were considered. The psychological theory of risk (also known as Cognitive Bias theory) was tested, along with the Cultural theory of risk. The psychological approach required psychometric testing across three of the fictional projects. Results show that dread had a significant effect across all projects tested. Other factors such as ‘dread related to perceived fatal risk’ and a ‘fear of the unknown’ were found to be statistically significant in explaining the risk score for the one project only: using radiation in the treatment of water. The Cultural theory of risk considers whether the risk scores obtained were due to the worldview of the risk assessors undertaking the measurement. Each respondent responded to a cultural cognition survey which placed them in one of four worldviews: hierarchist, egalitarian, individualist or fatalist. In regressing these worldviews to risk scores, it was found that no statistically significant relationship existed between the two. Risk scores varied drastically between the respondents, indicating little objectivity, however the psychological theory of risk sheds light on the biases of risk assessors when undertaking these assessments, and especially the effect of dread in imagined scenarios. This research is unique in that the study is undertaken comparing risk matrix scores through to psychological attributes and cultural worldviews in the water sector, a sector fraught with preconceived notions of risk. Water authorities can take heed of these findings in ensuring they understand the bias intrinsic to their risk measurement approaches. This can help to guarantee that they are able to effectively plan for future problems of population growth and climate change in a way that is cognisant of personal bias