Risk-Benefit Analysis

Second Edition

Richard Wilson

Edmund A. C. Crouch

    Preface

    1. Introduction: Perspective on Risk

    Perception is Crucial

    Definition of Risk

    Risk Changes as Events Unfold

    Measures of Risk

    Different Measures Can Lead to Different Decisions

    Absolute or Incremental Risk

    Defining the System Boundary

    Layout of the Book

    2. Methods of Risk Calculation and Estimation

    Evaluation of "Historical" Risks

    "New" Risks: (1) Factorization of an Engineering System with an Event Tree

    "New" Risks: (2) of Epidemiology and Its Ambiguities Risks of Doses Less than Background: The "Linear Default"

    Beneficial Effects and Hormesis

    New Risks: (3) The Use of Animal Data to Estimate Risks to Humans

    Probability of Causation

    Elicitation of Expert Opinion

    Exposure and Dose Estimation

    The Risk of a System--the Impact Pathway Approach

    Risk of the Impossible

    Large and Immeasurable Risks

    The Chimera of Zero Risk--Predictable but Irrelevant

    3. Uncertainty and Variability

    Risk Implies Uncertainty

    Different Types of Uncertainty

    As Risk Changes with Time, So Does Uncertainty

    Stochastic Uncertainties

    Variability vs. Uncertainty

    Uncertainty vs. Error

    Independence of Uncertainties

    Uncertainty in Cancer Risk Assessment

    Monte Carlo Models

    Model Uncertainty

    Uncertainty in Expert Elicitation

    Overconfidence in Uncertainty Estimates

    4. Perception of Risks

    Tversky's Analyses

    Other Attributes and Dimensions

    Managers and Decision Makers Consider Public Perception

    Comparing Risks (Risk-Risk Comparisons)

    Comparing Risks for the Same Benefit (Cost Effectiveness)

    Expression of Risks

    Public Misconceptions

    Common Public Misconceptions

    Recipe for Communication

    5. Formal Comparison of Risk and Benefit

    Distributional Inequity

    Deriving Suitable Value Functions

    Choice of Discounting Rates

    Approximations and Simplified Schemes

    6. Risk Management: Managing and Reducing Risks

    We Calculate Risks in Order to Reduce Them

    Schemes for Analyzing Risk Management Options

    Criteria for Risk Management

    The Ban or Taboo

    Best Available Control Technology

    Risk-Cost-Benefit Analysis

    The Precautionary Principle

    Regulation on Upper Limit of Risk

    Risk versus Certainty of Information

    The "De Minimis" Risk

    Risk-related Decisions of the U.S. EPA

    Probability of Causation

    Management by Avoiding Precursors

    Asbestos and Dioxin

    Reducing Risk by Technological Improvement

    Radiation Protection

    Economic Incentives

    The Multiple Uses of a Risk Assessment

    Use of Comparisons to Guide a Manager

    Safety Culture and the Importance of Incentives

    Congress as the Filter for Societal Values

    The Dual Role of the Courts

    7. Lists of Risks

    Some Examples of Risk Calculations

    The Risk (of Death) in Living

    Life Expectancy A Selection of Risks: Historically Calculated

    Time (or Action) to Reach One in a Million Risk

    Loss of Life Expectancy (LOLE)

    A Partial List of Catastrophes

    Amounts Paid to Avert Deaths

    Variation and Uncertainties

    Detailed Discussions of Some Risks

    8. Bibliography

    Books

    Journals

    Websites

    Specific References

    Appendix 1: Some Famous Quotations

    Appendix 2: Application of EPA's Hazardous Waste

    Identification Rule

    1. Variability

    2. Uncertainty

    3. Legislative Mandate and its Interpretation

    4. Precise Definitions

    Appendix 3: Procedure Used for Age Adjustment by NCHS

    Appendix 4: Are Mushrooms Safe to Eat, or Should They Be Considered Toxic Waste?

    The Problem

    Materials and Methods

    Results

    Implications

    Modifying Comments

    Appendix 5: Evaluating the Lung-Cancer Risks Due to Smoking, Exposure to Asbestos, and Their Combination

    Smoking

    Asbestos

    Assigning Causation of Lung Cancer to Smoking and Asbestos--the Logic of the Approach

    Interaction between Smoking and Cigarettes

    Epilog

    Index

  • Cover: Risk-Benefit Analysis

Richard Wilson is Mallinckrodt Professor of Physics at Harvard University.

Edmund A. C. Crouch is Principal, Cambridge Environmental, Inc.