ABSTRACT
Two elements define risk: probability and severity. Ehrlich and Becker (1972) recognized that risk can be reduced by decreasing either element, privately or collectively. They define decreased probability as self-protection, and decreased severity as self-insurance. Recent extensions of self-protection and self-insurance models have illustrated their wide applicability and importance to the theory of individual choice under risk (see, for exam ple, Hiebert, 1983; Centner and Wetzstein, 1987; Shogren and Crocker, 1990a).
