Introduction
Evolutionary Health
Co-Evolution of Disease & Living Conditions
Diabetes
Malaria
Health Effects
What is Risk?
Environmental Risk
Risk Assessment
Risk Abatement
Risk Perception
Risk Management
Uncertainty & Other Features of Risk Assessment
Precautionary Principle
Appendix 1: Contaminants
Appendix 2: Environmnet & Reproductive Health
Exercises
Internet Links
Other Resources
Health & Risk System PDF
Printer-Friendly Web Version

Risk Management

Once possible means of minimizing risk have been identified, it becomes necessary to make decisions regarding the level of risk to which we are willing to expose ourselves. Most experts readily agree (at least in theory) that when risk arises from human or technological activity, it is first important to evaluate whether the risky activity is necessary, or whether safer alternatives exist. Unfortunately, the definition of "necessary” varies depending upon the motivations of the assessor, and insufficient attention is given to the exploration of plausible alternatives. Risk assessment has been misused extensively in the past decades, often for the sake of corporate economic profit.

In almost any situation, risk abatement has costs of money, time, or other inconveniences. We must therefore decide how much risk abatement we are willing to "buy." We often choose a risk management strategy by comparing the concepts of "acceptable risk" and "optimal risk."

Acceptable risk is the risk that individuals or society say is okay. We all tolerate certain levels of risk in our daily lives. For example, we may ride in a car without a seatbelt, eat too many cheeseburgers, go skiing twice a year, or smoke a few cigarettes a day. Each activity is associated with some risks, but consciously or subconsciously, we accept that risk.

Empirical studies have been attempted to determine whether or not society deems a certain level of risk acceptable. Risk acceptability is determined by studying an individual's "revealed" or "expressed” preferences. Revealed preferences are those that are inferred from levels of risk people have accepted in the past. Expressed preferences are obtained by asking people directly what levels of risk they find acceptable.

On the scale of population risk (as opposed to the individual risks we mentioned before), government or regulatory agencies will often set levels of acceptable risk in the form of thresholds below which risk will be tolerated. For example, the EPA sets drinking water standards limiting the amounts of contaminants that may be present in the public drinking water supply. They do this by setting threshold limits for contaminant concentrations below which the risk presented by these contaminants is considered "acceptable."
Optimal risk is determined by quantitatively assessing the pros and cons of a risk. Optimal risk "implies a trade-off that minimizes the sum of all undesirable consequences." The classic economics answer to the question of optimal risk is that "the optimal level is where the sum of the cost of risk abatement and the expected losses from risk is at a minimum."

 

Figure 1: Optimal risk as determined by minimum sum of cost of risk abatement and expected losses from risk. (from Morgan, M. Granger. "Choosing and Managing Technology-Induced Risk," IEEE Spectrum, vol. 18, no. 12, pp. 53-60. December 1981.)

 

In determining optimal risk, assessors attempt to quantify the costs and benefits of a risky activity. They often quantify and measure in monetary units. The problem is that they are often assigning monetary values to things that shouldn't be priced. How does one ethically place a price on human life, ecological health, quality of life, opportunity, or other such "costs" and "benefits"?

 

 

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  ©Copyright 2003 Carnegie Mellon University
This material is based upon work supported by the National Science Foundation under Grant Number 9653194. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation.