Assessing uncertain ventures using experts' judgments in the form of subjective probabilities

The paper deals with a procedure known as ASPRO which has been successfull applied at Shell Oil Company. Section II addresses general problems encountered in using subjective assessment procedures. Section III introduces ASPRO's decomposition process which is designed to alleviate some of the problems. The decomposition process produces a questionnaire, the answers to which are the inputs to the ASPRO assessment procedure. Examples of the questionnaire for assessing political risks to oil investment ventures and analyzing new product sectors are given. Section IV explains how the respondents assess the component parts, and Section V outlines the mechanical procedures which are used to combine the assessments. Examples of how ASPRO's output can be used to communicate the respondents' quantified judgments are given in Section VI. Conclusions are in Section VII.     

Low‐Probability Flood Risk Modeling for New York City

The devastating impact by Hurricane Sandy (2012) again showed New York City (NYC) is one of the most vulnerable cities to coastal flooding around the globe. The low‐lying areas in NYC can be flooded by nor'easter storms and North Atlantic hurricanes. The few studies that have estimated potential flood damage for NYC base their damage estimates on only a single, or a few, possible flood events. The objective of this study is to assess the full distribution of hurricane flood risk in NYC. This is done by calculating potential flood damage with a flood damage model that uses many possible storms and surge heights as input. These storms are representative for the low‐probability/high‐impact flood hazard faced by the city. Exceedance probability‐loss curves are constructed under different assumptions about the severity of flood damage. The estimated flood damage to buildings for NYC is between US$59 and 129 millions/year. The damage caused by a 1/100‐year storm surge is within a range of US$2 bn–5 bn, while this is between US$5 bn and 11 bn for a 1/500‐year storm surge. An analysis of flood risk in each of the five boroughs of NYC finds that Brooklyn and Queens are the most vulnerable to flooding. This study examines several uncertainties in the various steps of the risk analysis, which resulted in variations in flood damage estimations. These uncertainties include: the interpolation of flood depths; the use of different flood damage curves; and the influence of the spectra of characteristics of the simulated hurricanes.