Decision analysis and risk models for land development affecting infrastructure systems

Coordination and layering of models to identify risks in complex systems such as large-scale infrastructure of energy, water, and transportation is of current interest across application domains. Such infrastructures are increasingly vulnerable to adjacent commercial and residential land development. Land development can compromise the performance of essential infrastructure systems and increase the costs of maintaining or increasing performance. A risk-informed approach to this topic would be useful to avoid surprise, regret, and the need for costly remedies. This article develops a layering and coordination of models for risk management of land development affecting infrastructure systems. The layers are: system identification, expert elicitation, predictive modeling, comparison of investment alternatives, and implications of current decisions for future options. The modeling layers share a focus on observable factors that most contribute to volatility of land development and land use. The relevant data and expert evidence include current and forecasted growth in population and employment, conservation and preservation rules, land topography and geometries, real estate assessments, market and economic conditions, and other factors. The approach integrates to a decision framework of strategic considerations based on assessing risk, cost, and opportunity in order to prioritize needs and potential remedies that mitigate impacts of land development to the infrastructure systems. The approach is demonstrated for a 5,700-mile multimodal transportation system adjacent to 60,000 tracts of potential land development.     

Shortcuts in complex engineering systems: a principal-agent approach to risk management

In this article, we examine the effects of shortcuts in the development of engineered systems through a principal-agent model. We find that occurrences of illicit shortcuts are closely related to the incentive structure and to the level of effort that the agent is willing to expend from the beginning of the project to remain on schedule. Using a probabilistic risk analysis to determine the risks of system failure from these shortcuts, we show how a principal can choose optimal settings (payments, penalties, and inspections) that can deter an agent from cutting corners and maximize the principal's value through increased agent effort. We analyze the problem for an agent with limited liability. We consider first the case where he is risk neutral; we then include the case where he is risk averse.     

Risk analysis under attack: How risk science can address the legal,social, and reputational liabilities faced by risk analysts

The role of the risk analyst is critical in understanding and managing uncertainty. However, there is another type of uncertainty that is rarely discussed: The legal, social, and reputational liabilities of the risk analyst. Recent events have shown that professionals participating in risk analysis can be held personally liable. It is timely and important to ask: How can risk science guide risk analysis with consideration of those liabilities, particularly in response to emerging and unprecedented risk. This paper studies this topic by: (1) Categorizing how professionals with risk analysis responsibilities have historically been held liable, and (2) developing a framework to address uncertainty related to those potential liabilities. The result of this framework will enable individual analysts and organizations to investigate and manage the expectations of risk analysts and others as they apply risk principles and methods. This paper will be of interest to risk researchers, risk professionals, and industry professionals who seek maturity within their risk programs.     

Measurement error, skewness, and risk analysis: coping with the long tail of the distribution.

Probabilistic risk analyses often construct multistage chance trees to estimate the joint probability of compound events. If random measurement error is associated with some or all of the estimates, we show that resulting estimates of joint probability may be highly skewed. Joint probability estimates based on the analysis of multistage chance trees are more likely than not to be below the true probability of adverse events, but will sometimes substantially overestimate them. In contexts such as insurance markets for environmental risks, skewed distributions of risk estimates amplify the "winner's curse" so that the estimated risk premium for low-probability events is likely to be lower than the normative value. Skewness may result even in unbiased estimators of expected value from simple lotteries, if measurement error is associated with both the probability and pay-off terms. Further, skewness may occur even if the error associated with these two estimates is symmetrically distributed. Under certain circumstances, skewed estimates of expected value may result in risk-neutral decisionmakers exhibiting a tendency to choose a certainty equivalent over a lottery of equal expected value, or vice versa. We show that when distributions of estimates of expected value are, positively skewed, under certain circumstances it will be optimal to choose lotteries with nominal values lower than the value of apparently superior certainty equivalents. Extending the previous work of Goodman (1960), we provide an exact formula for the skewness of products.     

Intake fraction for multimedia pollutants: a tool for life cycle analysis and comparative risk assessment.

We employ the intake fraction (iF) as an effective tool for expressing the source-to-intake relationship for pollutant emissions in life cycle analysis (LCA) or comparative risk assessment. Intake fraction is the fraction of chemical mass emitted into the environment that eventually passes into a member of the population through inhalation, ingestion, or dermal exposure. To date, this concept has been primarily applied to pollutants whose primary route of exposure is inhalation. Here we extend the use of iF to multimedia pollutants with multiple exposure pathways. We use a level III multimedia model to calculate iF for TCDD and compare the result to one calculated from measured levels of dioxin toxic equivalents in the environment. We calculate iF for emissions to air and surface water for 308 chemicals. We correlate the primary exposure route with the magnitudes of the octanol-water partition coefficient, Kow, and of the air-water partitioning coefficient (dimensionless Henry constant), Kaw. This results in value ranges of Kow and Kaw where the chemical exposure route can be classified with limited input data requirements as primarily inhalation, primarily ingestion, or multipathway. For the inhalation and ingestion dominant pollutants, we also define empirical relationships based on chemical properties for quantifying the intake fraction. The empirical relationships facilitate rapid evaluation of many chemicals in terms of the intake. By defining a theoretical upper limit for iF in a multimedia environment we find that iF calculations provide insight into the multimedia model algorithms and help identify unusual patterns of exposure and questionable exposure model results.     

Valuation of childhood risk reduction: the importance of age, risk preferences, and perspective.

This article explores two problems analysts face in determining how to estimate values for children's health and safety risk reductions. The first addresses the question: Do willingness‐to‐pay estimates for health risk changes differ across children and adults and, if so, how? To answer this question, the article first examines the potential effects of age and risk preferences on willingness to pay. A summary of the literature reporting empirical evidence of differences between willingness to pay for adult health and safety risk reductions and willingness to pay for health and safety risk reductions in children is also provided. The second dimension of the problem is a more fundamental issue: Whose perspective is relevant when valuing children's health effects—society's, children's, adults‐as‐children, or parents'? Each perspective is considered, followed ultimately by the conclusion that adopting a parental perspective through an intrahousehold allocation model seems closest to meeting the needs of the estimation problem at hand. A policy example in which the choice of perspective affects the outcome of a regulatory benefit‐cost analysis rounds out the article and emphasizes the importance of perspective.     

Prioritization of bridges and tunnels in earthquake risk mitigation using multicriteria decision analysis: Application to Lisbon

This paper presents the development of a multicriteria value model enabling the prioritization of bridges and tunnels according to their structural vulnerability and strategic importance for the formulation and implementation of civil protection policies, both for retrofitting and emergency management, in face of seismic events. An interactive structuring process was developed with a group of key-players to carefully define the evaluation criteria and the MACBETH approach was extensively used (i) to facilitate the assessment from the group of the judgmental information necessary to build value functions and (ii) to establish relative weights for the criteria. The model was subsequently explored to prioritize the bridges and tunnels of a zone in Lisbon with high seismic hazard.     

Minimization of passenger takeoff and landing risk in offshore helicopter transportation: Models,approaches and analysis

Offshore petroleum industry uses helicopters to transport the employees to and from installations. Takeoff and landing represent a substantial part of the flight risks for passengers. In this paper, we propose and analyze approaches to create a safe flight schedule to perform pickup of employees by several independent flights. Two scenarios are considered. Under the non-split scenario, exactly one visit is allowed to each installation. Under the split scenario, the pickup demand of an installation can be split between several flights. Interesting links between our problem and other problems of combinatorial optimization, e.g., parallel machine scheduling and bin-packing are established. We provide worst-case analysis of the performance of some of our algorithms and report the results of computational experiments conducted on randomly generated instances based on the real sets of installations in the oil fields on the Norwegian continental shelf. This paper is the first attempt to handle takeoff and landing risk in a flight schedule that consists of several flights and lays ground for the study on more advanced and practically relevant models.     

Effect of Providing the Uncertainty Information About a Tornado Occurrence on the Weather Recipients’ Cognition and Protective Action: Probabilistic Hazard Information Versus Deterministic Warnings

Currently, a binary alarm system is used in the United States to issue deterministic warning polygons in case of tornado events. To enhance the effectiveness of the weather information, a likelihood alarm system, which uses a tool called probabilistic hazard information (PHI), is being developed at National Severe Storms Laboratory to issue probabilistic information about the threat. This study aims to investigate the effects of providing the uncertainty information about a tornado occurrence through the PHI's graphical swath on laypeople's concern, fear, and protective action, as compared with providing the warning information with the deterministic polygon. The displays of color‐coded swaths and deterministic polygons were shown to subjects. Some displays had a blue background denoting the probability of any tornado formation in the general area. Participants were asked to report their levels of concern, fear, and protective action at randomly chosen locations within each of seven designated levels on each display. Analysis of a three‐stage nested design showed that providing the uncertainty information via the PHI would appropriately increase recipients’ levels of concern, fear, and protective action in highly dangerous scenarios, with a more than 60% chance of being affected by the threat, as compared with deterministic polygons. The blue background and the color‐coding type did not have a significant effect on the people's cognition of the threat and reaction to it. This study shows that using a likelihood alarm system leads to more conscious decision making by the weather information recipients and enhances the system safety.     

Three dimensions of COVID-19 risk perceptions and their socioeconomic correlates in the United States: A social media analysis

Social media analysis provides an alternate approach to monitoring and understanding risk perceptions regarding COVID-19 over time. Our current understandings of risk perceptions regarding COVID-19 do not disentangle the three dimensions of risk perceptions (perceived susceptibility, perceived severity, and negative emotion) as the pandemic has evolved. Data are also limited regarding the impact of social determinants of health (SDOH) on COVID-19-related risk perceptions over time. To address these knowledge gaps, we extracted tweets regarding COVID-19-related risk perceptions and developed indicators for the three dimensions of risk perceptions based on over 502 million geotagged tweets posted by over 4.9 million Twitter users from January 2020 to December 2021 in the United States. We examined correlations between risk perception indicator scores and county-level SDOH. The three dimensions of risk perceptions demonstrate different trajectories. Perceived severity maintained a high level throughout the study period. Perceived susceptibility and negative emotion peaked on March 11, 2020 (COVID-19 declared global pandemic by WHO) and then declined and remained stable at lower levels until increasing once again with the Omicron period. Relative frequency of tweet posts on risk perceptions did not closely follow epidemic trends of COVID-19 (cases, deaths). Users from socioeconomically vulnerable counties showed lower attention to perceived severity and susceptibility of COVID-19 than those from wealthier counties. Examining trends in tweets regarding the multiple dimensions of risk perceptions throughout the COVID-19 pandemic can help policymakers frame in-time, tailored, and appropriate responses to prevent viral spread and encourage preventive behavior uptake in the United States.     

Public participation in life cycle assessment and risk assessment: a shared need.

Life cycle assessment (LCA) and risk assessment are operationally different but share the common purpose of supporting decisions about reducing threats to human welfare. Both analysis methods also involve a complex mixture of science and value judgments reflecting epistemological as well as moral and esthetic values. The inability of risk assessment and LCA to be "value free" has been a source of considerable controversy in both communities. Recognition of the contingent and social nature of human interpretation of the risks and environmental impacts created by public and private decisions has led to an increased appreciation of the importance of involving interested and affected parties in risk characterization. Comparison of the value-based nature of LCA and risk assessment demonstrates the need for participation in LCA. Although the need for participation by affected parties in decision-making processes is gaining acceptance, there is little agreement as to how participation should be structured. Risk assessment and LCA have a shared need for research examining the design and analysis of participation processes appropriate to a given decision context. A proposed framework recommends participation strategies designed to enhance the effectiveness of policy-driven analyses such as risk assessment and LCA based on the level of trust that interested and affected parties have for other policy participants.     

An emotion-based model of risk perception and stigma susceptibility: cognitive appraisals of emotion, affective reactivity, worldviews, and risk perceptions in the generation of technological stigma.

A study (N=198) was conducted to examine hypotheses derived from an emotion-based model of stigma responses to radiation sources. A model of stigma susceptibility is proposed in which affective reactions and cognitive worldviews activate predispositions to appraise and experience events in systematic ways that result in the generation of negative emotion, risk perceptions, and stigma responses. Results of structural equation modeling supported the hypotheses. Radiation sources that scored higher on a measure of stigma were included in the analyses (i.e., nuclear power plants, radioactive waste from nuclear power plants, radiation from nuclear weapons testing). Individual differences in negative reactivity and worldviews were associated with the strength of emotional appraisals that were associated, in turn, with negative emotion toward stigmatized radiation sources. As hypothesized, the model fit better with perceived risk as a function of negative emotion rather than vice versa. Finally, a measure of stigma was associated with negative emotion and, to a lesser extent, with risk perceptions. Risk communication about stigmatized objects may benefit from a more complete understanding of how affective and emotional reactions are constructed and the routes through which they affect responses and behaviors.     

Conditional Uncertainty Analysis and Implications for Decision Making: The Case of WIPP

Uncertainty analyses and the reporting of their results can be misinterpreted when these analyses are conditional on a set of assumptions generally intended to bring some conservatism in the decisions. In this paper, two cases of conditional uncertainty analysis are examined. The first case includes studies that result, for instance, in a family of risk curves representing percentiles of the probability distribution of the future frequency of exceeding specified consequence levels conditional on a set of hypotheses. The second case involves analyses that result in an interval of outcomes estimated on the basis of conservative assumptions. Both types of results are difficult to use because they are sometimes misinterpreted as if they represented the output of a full uncertainty analysis. In the first case, the percentiles shown on each risk curve may be taken at face value when in reality (in marginal terms) they are lower if the chosen hypotheses are conservative. In the second case, the fact that some segments of the resulting interval are highly unlikely—or that some more benign segments outside the range of results are quite possible—does not appear. Also, these results are difficult to compare to those of analyses of other risks, possibly competing for the same risk management resources, and the decision criteria have to be adapted to the conservatism of the hypotheses. In this paper, the focus is on the first type (conditional risk curves) more than on the second and the discussion is illustrated by the case of the performance assessment of the Waste Isolation Pilot Plant in New Mexico. For policy-making purposes, however, the problems of interpretation, comparison, and use of the results are similar.     

Manufacturing strategies and financial performance—The effect of advanced information technology: CAD/CAM systems

Nowadays, the business environment is characterized by great uncertainty and variability. In this environment, information technology (IT) has proved to be an important strategic ingredient for the creation of competitive advantage. This role of IT has been widely accepted during the past few years [Feeny D. Creating and sustaining competitive advantage with IT. In: Earl M, editor. Information management the strategic direction. Oxford, 1990; Ives B. Wingtip Courriers, Southern Methodist University Case Study #SMY/MIS/90-01, Edwin L. Cox School of Business, Dallas, TX, January 1990].     

The social structure of leadership and creativity in engineering design teams: An empirical analysis

Creativity is essential for research and development efforts. Unfortunately, little is known about how the role of team leaders determines the team’s creativity. Based on a sample of 39 engineering design teams in the space industry, this study examines the effects of leader position within different flows of communication on team creativity. The results indicate that the balance between holding a central or a peripheral position indeed determines the creativity of such teams. Specifically, very central and very peripheral positions of team leaders within the work-flow and awareness network hamper team creativity, whereas peripheral situated team leaders within the information network propel the creativity. In addition, team leaders stimulate creativity when they stay central in the external information network. In managerial terms, the analyses implicate that stimulating engineering design team creativity requires team leaders to smartly limit their involvement in communication and mainly act as gatekeepers to external sources of information.     

Valuing mortality risk reductions from environmental, transport, and health policies: a global meta-analysis of stated preference studies

We conduct, to our knowledge, the first global meta-analysis (MA) of stated preference (SP) surveys of mortality risk valuation. The surveys ask adults their willingness to pay (WTP) for small reductions in mortality risks, deriving estimates of the sample mean value of statistical life (VSL) for environmental, health, and transport policies. We explain the variation in VSL estimates by differences in the characteristics of the SP methodologies applied, the population affected, and the characteristics of the mortality risks valued, including the magnitude of the risk change. The mean (median) VSL in our full data set of VSL sample means was found to be around $7.4 million (2.4 million) (2005 U.S. dollars). The most important variables explaining the variation in VSL are gross domestic product (GDP) per capita and the magnitude of the risk change valued. According to theory, however, VSL should be independent of the risk change. We discuss and test a range of quality screening criteria in order to investigate the effect of limiting the MA to high-quality studies. When limiting the MA to studies that find statistically significant differences in WTP using external or internal scope tests (without requiring strict proportionality), we find that mean VSL from studies that pass both tests tend to be less sensitive to the magnitude of the risk change. Mean VSL also tends to decrease when stricter screening criteria are applied. For many of our screened models, we find a VSL income elasticity of 0.7-0.9, which is reduced to 0.3-0.4 for some subsets of the data that satisfy scope tests or use the same high-quality survey.     

Lessons learned from Toulouse and Buncefield disasters: from risk analysis failures to the identification of atypical scenarios through a better knowledge management

The recent occurrence of severe major accidents has brought to light flaws and limitations of hazard identification (HAZID) processes performed for safety reports, as in the accidents at Toulouse (France) and Buncefield (UK), where the accident scenarios that occurred were not captured by HAZID techniques. This study focuses on this type of atypical accident scenario deviating from normal expectations. The main purpose is to analyze the examples of atypical accidents mentioned and to attempt to identify them through the application of a well-known methodology such as the bow-tie analysis. To these aims, the concept of atypical event is accurately defined. Early warnings, causes, consequences, and occurrence mechanisms of the specific events are widely studied and general failures of risk assessment, management, and governance isolated. These activities contribute to outline a set of targeted recommendations, addressing transversal common deficiencies and also demonstrating how a better management of knowledge from the study of past events can support future risk assessment processes in the identification of atypical accident scenarios. Thus, a new methodology is not suggested; rather, a specific approach coordinating a more effective use of experience and available information is described, to suggest that lessons to be learned from past accidents can be effectively translated into actions of prevention.     

Project risk management using multiple criteria decision-making technique and decision tree analysis: a case study of Indian oil refinery

This study proposes an integrated analytical framework for effective management of project risks using combined multiple criteria decision-making technique and decision tree analysis. First, a conceptual risk management model was developed through thorough literature review. The model was then applied through action research on a petroleum oil refinery construction project in the Central part of India in order to demonstrate its effectiveness. Oil refinery construction projects are risky because of technical complexity, resource unavailability, involvement of many stakeholders and strict environmental requirements. Although project risk management has been researched extensively, practical and easily adoptable framework is missing. In the proposed framework, risks are identified using cause and effect diagram, analysed using the analytic hierarchy process and responses are developed using the risk map. Additionally, decision tree analysis allows modelling various options for risk response development and optimises selection of risk mitigating strategy. The proposed risk management framework could be easily adopted and applied in any project and integrated with other project management knowledge areas.