What is the subjective judgment of individuals or organizations regarding the characteristics and severity of a risk called?

The term that identifies the subjective judgment of individuals or organizations regarding the characteristics and severity of a risk is known as risk perception. This concept recognizes that people's views and feelings about risk can vary significantly, influenced by their experiences, knowledge, and the contexts in which they encounter risks. Risk perception plays a crucial role in decision-making because it shapes how individuals or organizations react to potential dangers, assess risks, and determine appropriate actions to mitigate or accept them.

In contrast, risk analysis involves systematically identifying and evaluating risks, often using quantitative methods, while risk management refers to the strategies and processes employed to minimize and control risks. Risk transfer, on the other hand, involves shifting the potential financial consequences of a risk to another party, typically through mechanisms like insurance or contracts. These differences illustrate why risk perception is specifically focused on the subjective views held by stakeholders regarding risk itself.