Risk, Uncertainty and Everything Else

According to a model for homeland security risk analysis that is currently under consideration for use in supporting resource allocation decisions, the formula for the risk associated with a specified scenario is as follows:

Risk = C * L(S|A) * L(A)  (Equation 1)

where L(A) is the likelihood of an attack being attempted, L(S|A) is the likelihood of adversary success given attack, C is the consequences following a successful attack, and the total risk is obtained by summing the results of Equation 1 for all relevant scenarios.  At first glance, it would appear to the casual reader that this model is simply an implementation of risk measured in terms of expected loss, with the exception of the non-standard representation of L(.) for expressing the probability of the event contained within the parenthesis…

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From 5-7 June 2008, I will be attending the “Critical Infrastructure Protection: Metrics and Tools” workshop sponsored by The Center for Homeland Defense and Security, Naval Postgraduate School, in Monterey, CA.

The agenda for this conference is as follows…

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Lately I have been doing a lot of traveling between State College, PA and Washington, DC for meetings and such.  To pass the 3.5-hours minimum driving time each way, I, like many others listen to audiobooks on subjects that excite me.  The following is a list of titles for good audiobooks I listened to that are sure to educate, if not inspire, risk professionals.  Note that I purchased all these books from Audible.com via ITunes.

• Freakonomics, by Stephen D. Levitt and Stephen J. Dubner.  The essence of this book was that everything is governed by incentives.  But, as the author points out in his preface, there really is no coherent theme to the book; it is just a compilation of interesting

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To follow up on my previous post regarding the work of Peter Sandman, I can’t help but advertise his short, yet important article entitled “Risk Words You Can’t Use” published in the August 2005 issue of The Synergist.  While this article is a quick read, I will distill it down further and caveat some with my personal experience:

• Conservative: To risk people, conservative means an overestimate of risk.  To laypeople, a “conservative” estimate is a low estimate.  So whereas a risk person would use conservative to overstate the risk, a layperson (or perhaps decision maker) may interpret the message to be an understatement of risk, and thereby think that the risk could be much worse.  Now, engineers and scientists understand what is meant by the

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For those unfamiliar with this description of risk, check out the website maintained by Peter Sandman.  Dr. Sandman is a scholar on risk communication and risk perception, and has made a name for himself via the concept “Risk = Hazard + Outrage.”  He has published some very interesting things, one of which can be found on my list of 100 books to review.  A selection of his works is available electronically on his curriculum vitae.

Back to the formula “Risk = Hazard + Outrage”…  This is not a mathematical formula in any strict sense of the word.  Rather it is conceptual in nature, where the “risk” is defined by the objective nature of the “hazard” and augmented by the “outrage” felt by the individuals exposed…

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