| Risk
Risk is
the measure of the effect of an event, such as that of an effect taking
place at a given level of exposure. Although the term "risk"
is generally associated with negative outcomes, that is not always the
case. An example of a risk with a possible positive or negative outcome
is the risk you take when buying a lottery ticket. With a very small initial
investment, you risk a (large) gain or (small) loss. The University of
Virginia Center for Risk Management of Engineering Systems has a nice
introduction to the topic (http://www.sys.virginia.edu/risk/).
A risk
situation basically includes two components:
- exposure
processes - how exposure occurs and to what degree
- effects
processes - possible changes and how they may occur as a result of that
exposure
In the lottery example given above, the ticket is the exposure. The more
tickets you purchase, the higher your exposure and risk. The effects processes
include winning a large amount of money, or losing your investment (money
for purchase of tickets).
We talk
about exposure and effect in terms of whether they are definite or occur
by chance. Any given risk situation has four possible combinations of
effect and exposure:
- definite
exposure and definite effect
- definite
exposure and chance effect
- chance
exposure and definite effect
- chance
exposure and chance effect
In formal
discussions of risk, the word chance is replaced by "probabilistic,"
and the words "chosen" or "definite" are replaced
by "deterministic."
Which combination of exposure and effect is most appropriate for the lottery
example? Since people who play lottery choose to purchase their tickets,
exposure is deterministic. Since lottery numbers are drawn randomly (or
tickets distributed randomly), the effect is probabilistic.
Determine
whether the four following situations have deterministic or probabilistic
exposures and effects. Click the link for the answers.
(Exercise
adapted from M.Granger Morgan's "Probing the Question of Technology-
Induced Risk," IEEE Spectrum, vol. 18, no. 11, pp. 58-64.
November 1981.)
An
example that highlights these two components is the risk of getting lung
cancer from smoking. What is the change - a change in state of health
i.e., getting cancer. What is the chance? Not everyone who smokes gets
cancer since your health also depends on genetics and several unknown
variables. However, you can look at the percentage of smokers who got
lung cancer over a period of time to come up with a probability of a smoker's
chances of getting cancer.
Risk is formally defined in terms of the chance of exposure and the magnitude
of effect:
risk R (from an agent)= (probability of exposure P)*(the
severity of the effect or consequence C)
Note that while we often talk of risk as chance in everyday speech, the
formal definition of risk is a combination of chance and consequence.
Situations of exposure can be thought of in terms of P and C. Failure
of technologies is a big source of risk in modern life. For example, when
we consider a technology (anything ranging from a simple light bulb to
an airplane or a power plant), the risk of using the technology is composed
of the probability of its failure causing an “exposure” and
the consequences of that exposure. Technologies are often designed to
reduce both P and C as much as possible. But some technologies have severe
consequences when they fail. So great attention is paid in the design
and implementation of the technology to minimize P, the probability of
failure (which causes the “exposure”). But if it fails, the
consequences are sever. The space shuttle is an example.
The failure of complex technologies such as the shuttle or an airplane
is catastrophic and the effect is quickly manifest. Such catastrophic
events include exposure (usually accidental, but sometimes intentional
in unusual situations such as war) that is acute. The
effects are also acute and more visible, and therefore the cause-effect
relationship is obvious. In the case of many environmental exposures,
the “failure”
leading to exposure (as well as the consequences) happens over a period
of time and so the risk is hard to calculate. An example is air pollution
or smoking leading to lung disease such as cancer. In this case, both
the exposure and effect are chronic and probabilistic. The cause-effect
relationship is hard to establish because other exposures may be occurring
over the same time.
In general, we may think of technological risk as having high (H) or low
(L) P and C. Thus the following matrix classifies technology in terms
of P and C.
| |
C |
| P |
LP,
LC |
HP,
LC |
| HP,
LC |
HP,
HC |
Examples
of all but HP-HC technologies are easy to find. A HP-HC technology never
becomes widespread because engineering design works to minimize both P
and C and manages to lower both, or at least one. Thus technologies that
are HP-HC early in the evolution are redesigned to reduce the risk of
failure.
| Exercise: |
| 1. |
Name
a technology that would exemplify each of the squares. Can
you think of a HP-HC technology?
|
| 2. |
Think
of two potential technology failures that pose a personal risk
to you. Classify them as low or high P and low or high C. |
|
The entire
risk process in society may be represented in a diagram similar to Figure
2.
| |
| Figure
4: Risk process in society. |
| Exercise: |
| Select
an activity you engage in routinely that results in a health
effect, positive or negative. Draw the risk process diagram.
Which of the steps are definite (deterministic) and which
of the steps are probabilistic? How can you affect (change)
the risk involved. |
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