Risk-Benefit Analysis

Table of Contents
 
 

Preface                                                 xi

1. Introduction: Perspective on Risk                     1

Perception is Crucial                                    3
Definition of Risk                                       7
Risk Changes as Events Unfold                            9
Measures of Risk 10
Different Measures Can Lead to Different Decisions      13
Absolute or Incremental Risk                            16
Defining the System Boundary                            17
Layout of the Book                                      20

2. Methods of Risk Calculation and Estimation           25
Evaluation of “Historical” Risks                        27
Historical Risk Plus a Model                            33
“New” Risks: (1)Factorization of an Engineering System
with an Event Tree                                      38
“New” Risks: (2) of Epidemiology and Its Ambiguities    45
Risks of Doses Less than Background: The “Linear
Default”                                                47
Beneficial Effects and Hormesis                         51
New Risks: (3) The Use of Animal Data to Estimate Risks
to Humans                                               53
Probability of Causation                                60
Elicitation of Expert Opinion                           62
Exposure and Dose Estimation                            63
The Risk of a System — the Impact Pathway Approach      68
Risk of the Impossible                                  71
Large and Immeasurable Risks                            72
The Chimera of Zero Risk — Predictable but Irrelevant   73

3. Uncertainty and Variability                          75
Risk Implies Uncertainty                                75
Different Types of Uncertainty                          77
As Risk Changes with Time, So Does Uncertainty          78
Stochastic Uncertainties                                78
Variability vs. Uncertainty                             79
Uncertainty vs. Error                                   82
Uncertainty in Cancer Risk Assessment                   84
Monte Carlo Models                                      85
Model Uncertainty                                       86
Uncertainty in Expert Elicitation                       88
Overconfidence in Uncertainty Estimates                 88

4. Perception of Risks                                  91
Tversky’s Analyses                                      92
Other Attributes and Dimensions                         94
Managers and Decision Makers Consider Public Perception 99
Comparing Risks (Risk-Risk Comparisons)                105
Comparing Risks for the Same Benefit (Cost
Effectiveness)                                         112
Expression of Risks                                    113
Public Misconceptions                                  115
Common Public Misconceptions                           115
Recipe for Communication                               120

5. Formal Comparison of Risk and Benefit               123
Distributional Inequity                                125
Issues in Deriving the Constants                       126
Discounting                                            131
Approximations and Simplified Schemes                  132

6. Risk Management: Managing and Reducing Risks        135
We Calculate Risks in Order to Reduce Them             136
Schemes for Analyzing Risk Management Options          136
Criteria for Risk Management                           140
The Ban or Taboo                                       143
Best Available Control Technology                      144
Risk-Cost-Benefit Analysis                             146
Regulation on Upper Limit of Risk                      146
Risk versus Certainty of Information                   148
The “De Minimis” Risk                                  148
Regulations of the U.S. EPA                            149
Probability of Causation                               150
Management by Avoiding Precursors                      154
Risk vs.Certainty of Information                       155
Asbestos and Dioxin                                    157
Reducing Risk by Technological Improvement             159
Radiation Protection                                   160
Economic Incentives                                    161
The Multiple Uses of a Risk Assessment                 162
Use of Comparisons to Guide a Manager                  162
Safety Culture and the Importance of Incentives        163
Congress as the Filter for Societal Values             164
The Dual Role of the Courts                            165

7. Lists of Risks                                      169
Some Examples of Risk Calculations                     170
The Risk (of Death) in Living                          170
Life Expectancy                                        172
A Selection of Risks: Historically Calculated          173
Time (or Action)to Reach One in a Million Risk         183
Loss of Life Expectancy (LOLE)                         185
A Partial List of Catastrophes                         188
Amounts Paid to Avert Deaths                           190
Variation and Uncertainties                            197
Detailed Discussions of Some Risks                     199

8. Bibliography                                        239
Books                                                  239
Journals                                               251
Websites                                               252
Specific References                                    255

Appendix 1: Some Famous Quotations                     277

Appendix 2: Application of EPA’s Hazardous Waste
Identification Rule                                    283
1.Variability                                          284
2.Uncertainty                                          285
3.Legislative Mandate and its Interpretation           286
4.Precise Definitions                                  289

Appendix 3: Procedure Used for Age Adjustment by NCHS  299

Appendix 4: Are Mushrooms Safe to Eat, or Should They
Be Considered Toxic Waste?                             301
The Problem                                            301
Materials and Methods                                  301
Results                                                302
Implications                                           303
Modifying Comments                                     305

Appendix 5:Evaluating the Lung-Cancer Risks Due to
Smoking, Exposure to Asbestos, and Their Combination   307
Smoking                                                308
Asbestos                                               316
Assigning Causation of Lung Cancer to Smoking and
Asbestos — the Logic of the Approach                   321
Interaction between Smoking and Cigarettes             324