• Ambiguity;
  • arsenic;
  • mortality rate;
  • perceived risk

Researchers have long recognized that subjective perceptions of risk are better predictors of choices over risky outcomes than science-based or experts’ assessments of risk. More recent work suggests that uncertainty about risks also plays a role in predicting choices and behavior. In this article, we develop and estimate a formal model for an individual's perceived health risks associated with arsenic contamination of his or her drinking water. The modeling approach treats risk as a random variable, with an estimable probability distribution whose variance reflects uncertainty. The model we estimate uses data collected from a survey given to a sample of people living in arsenic-prone areas in the United States. The findings from this article support the fact that scientific information is essential to explaining the mortality rate perceived by the individuals, but uncertainty about the probability remains significant.