The Availability Heuristic: Why Vivid Events Feel More Likely
We judge how likely something is by how easily examples come to mind. That skews decisions about risk and money.
By Iris Penhaligon | Oct 25, 2026 | 6 min
After seeing news coverage of a plane crash, many people feel flying is more dangerous, even though it remains one of the safest ways to travel. That is the availability heuristic at work.
Tversky and Kahneman described it in the 1970s: people estimate frequency or probability by how easily examples come to mind.
I Where it shows up
- — Overestimating dramatic risks like shark attacks or terrorism
- — Underestimating common risks like heart disease or car accidents
- — Buying insurance right after a disaster in the news
- — Investing in stocks that have been in the headlines
II Why it happens
Recent, emotional, and vivid events are easier to recall. Media coverage focuses on unusual events, making them seem more common than they are. This mental shortcut is often useful, but it can mislead when memorable events are not representative.
III Effects in markets
Investors may pile into sectors after dramatic success stories or flee after crashes, even when long-term prospects have not changed. Insurance purchases often spike after disasters and fall as memories fade.
IV Counter-measures
Look up base rates — how common something actually is. Ask whether you are reacting to a story or to data. For financial decisions, write down your reasoning before acting. See our herd behaviour guide.
This is general educational information about economics, not financial, investment, or tax advice. Consult a qualified, licensed professional before making financial decisions.
Further reading
- 1. The Framing Effect: Why “90% Survival” Beats “10% Mortality”
- 2. Status Quo Bias: Why We Stick With Defaults
- 3. Hyperbolic Discounting: Why Now Feels Worth More