I hear this a lot, "People are crazy." It gets said in a lot of different ways, but the core is people are irrational. They make bad decisions and bad decisions are irrational. For instance, people heavily invest in stock of the company that they work for. A portfolio like that leaves them vulnerable to too much risk of loss. Basically, people think the company that they work for is a safer bet than it is (as the people who worked for Enron found out).People mis-estimate risk. We are systematically wrong when guessing how risky some activity is due to what many claim are biological factors that were evolved when humans lived in pre-tribe groups. Two researchers, Kahneman and Tversky, won a Nobel prize for their work in demonstrating that people will take a risky bet when it's phased one way, but will reject the bet when it's phrased a little differently. They've also shown that people are consistently wrong when estimating how likely they are to die from various things, like car crashes for instance.
The November 2008 issue of Popular Science had a similar take on how irrational people are. They report that you are 40,000 times more likely to die in a car crash than on a roller coaster and "yet it's the amusement-park rides that scare people." We take things that seem like more immediate threats too seriously. We are afraid of flying but not pollution. There is a one in a million change that you will die in a plane crash but 40% of deaths are caused by pollution.
I think this is a little unfair though. You look at the risks (which are essentially the costs) and say that we should be doing less of the high cost activity. It's like saying, watching TV is cheaper than eating so you should really be watching TV and not eating. To say that a person should rationally be afraid of the risker/costlier activity ignores the relative benefits of the activities.
Going on a roller coaster gets you nothing but an adrenaline surge. Riding in a car allows you to see your family, get food, go to school and an array of other important activities. Even though the risks are higher the rewards are much greater. So we aren't afraid of getting in the car. The same is true of pollution versus planes. There are plenty of substitutes for long distance travel, but if you want to live a city (because of all the fun stuff there) you've got to be okay with the pollution.
Now, if only I could figure out why people are afraid of public speaking.
