SyllabusPPD 587

Course Syllabus: PPD 587

Risk Analysis (4 Units)

Catalogue Description

Concepts of risk analysis, risks in engineered systems, environmental risks, security risks; methods of risk analysis, fault trees and event trees; quantification of probabilities, use of data, models, and expert judgments; risks and decisions, interlinking risk analysis with risk management; applications to homeland security decisions.

Recommended preparation: MATH 108 or MATH 116

Instructor – Darius Lakdawalla

Office:RGL 202

Office Hours:By appointment (see below, in “Project Presentations”)

Email:

Telephone:(213) 740 6012

Teaching Assistant – Fynn Prager

Office:RTH 322

Office Hours:By appointment

Email:

Telephone:(714) 907-5225

Class Time and Location

Class Time:Mondays 2 to 5:20 PM

Location:DEN Classroom

Readings

All assigned readings will be posted on Blackboard in pdf format.

Optional Texts

Kammen, D.H., and Hassenzahl, D,M. Should We Risk It?New Haven: PrincetonUniversity Press, 1999.

Glickman, Theodore, and Michael Gough, eds. Readings in Risk. Washington, DC: Resources for the Future 1990.

Students may find either or both of the texts above useful as additional reference material.

Overview

This class is an introduction to risk analysis in several fields, including engineering risk analysis, environmental risk analysis, and security risk analysis. Examples will come from health care, product safety, national security, and other areas of public policy. Students will be introduced the concepts and methods of risk analysis. Students will also learn how to apply risk analysis in real world settings.

Objectives

  • Understand the basic concepts of risk analysis and the relationship between probability theory and modeling, risk analysis, and decision analysis
  • Understand how to interpret probability and probabilistic modeling, in the evaluation of risk
  • Learn how to understand and interpret the basic tools of risk analysis – fault trees, event trees, and simulation models
  • Understand the issues surrounding the use of risk analysis in decision making

Class Format

The class will be primarily in a lecture format. In addition, students will conduct a simple risk analysis project of their own choice and present progress reports throughout the class. Off-campus students can participate via Webex (presentations) and on the discussion board. Assigned readings will serve as preparation for lectures, and assigned problem sets will reinforce lecture material. There will be a written Final Exam administered in-class, during the final meeting. Off-campus students may take it at a proctored site, or make other arrangements with the instructor.

Tests and Grades

Grades will be assigned on the basis of homework assignments (15%), the quality of the three project presentations (45%), and the final exam (40%).

Assignments

The required homework assignments are those designated as being “DUE” in the syllabus. Assignments denoted as “EXTRA” are optional and will not be graded. For “DUE” assignments to count, they must be turned in to the Grader or the Instructor before the start of class on the given day. No assignment will be accepted any later than this. In the case of illness, documented by a signed and dated physician’s note, the assignment will be waived, and the homework grade computed on the basis of the remaining assignments.

Project Presentations

Students will form groups, each of which will be required to deliver three project presentations in class, during the course of the semester. Groups will be formed toward the start of the semester. Each group will be required to meet with the Instructor prior to each presentation. These meetings will take place by appointment, as indicated above, in lieu of regular office hours. Each presentation will be graded on the basis of: slide content, presentation style, and responses to questions. Each group may nominate one or more members to deliver each presentation, but all members of the group will receive a uniform grade.

Final Exam

An in-class final exam will be given during the last class period of the semester. Students will not be allowed to consult books, notes, electronic resources, or any other material during the test. Distance learning students will be required to take this exam at a proctored location on the same day. In the case of illness, documented by a signed and dated physician’s note, the final exam requirement will be waived for the student, and the course grade computed on the basis of homework assignments and project presentations.

TA Sessions

During the course of the semester, there will be two optional sessions run by the Teaching Assistant, to reinforce concepts related to the assignments. These will be scheduled so as to accommodate as many students as possible. They will also be videotaped and made available on the web for students who are unable to attend in-person.

Disability Services and Programs Statement

Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me (or to the TA) as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. – 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

Lecture Schedule - Risk Analysis PPD 587 / Spring 2010

Framework for risk analysis and risk management

Week 1: What is risk analysis?1/11/10

  1. Kunreuther, H. “Risk Analysis and Risk Management in an Uncertain World.” Risk Analysis, August 2002.
  2. Baron, D. “The Market and Nonmarket Environments” Chap.1 in Business and the Environment (Prentice-Hall, 2000)
  3. Kammen, D.H., and Hassenzahl, D,M. Should We Risk It? New Haven: PrincetonUniversity Press, 1999, Chapter 1. (Hereafter, KH.)

Week 2: Formulating decision problems1/25/10

  1. Keeney, R. Value-Focused Thinking (Cambridge: Harvard UniversityPress), Chap. 1.
  2. Keeney, R. and McDaniels, T. “A Framework to Guide Thinking and AnalysisRegarding Climate Change Policies” Risk Analysis, December 2001 (pp. 989-1000).
  3. Clemen, R. and Reilly R. Making Hard Decisions with Decision Tools (Pacific Grove, CA: Duxbury). Chap. 2 “Elements of Decision Problems.”

Due: Chemcare Homework Problem

Week 3: Statistics for Risk Analysis2/1/10

  1. KH, Chapter 3 & 4

Extra: 1 page write-up of Q. 1, 2, and 3, from Google problem at end of Baron, Ch.1.

Week 4: Uncertainty and Limited Information2/8/10

  1. KH, Chapter 3&4 (Continued)

Due: Project Presentation #1

TA Session: Techniques for solving decision problems, Time TBD

Week 5: Applying decision analysis2/22/10

  1. Clemen, R. and Reilly R. Making Hard Decisions with Decision Tools (Pacific Grove, CA: Duxbury). Chap. 3 “Structuring Decisions.”
  2. Boardman, T. et al.Cost-Benefit Analysis: Concepts and Practice (UpperSaddle River, NJ: Prentice-Hall) 2001. Chapter 1.

Due: Freemark Abbey Winery Case

Risk assessment and risk perception

Week 6: Technological Risk Assessment3/1/10

  1. Perrow, C. Normal Accidents New York: Basic Books 1984. “Introduction.”
  2. Morgan, G., “Risk Analysis and Management,” Scientific American, July 1993.
  3. Smith, C. and Borgonovo, E. “Decision Making During Nuclear Power Plant Incidents—A New Approach to the Evaluation of Precursor Events” Risk Analysis 2007, 27:1027-43.
  4. SKIM: Keeney, R. et. al., “Assessing the Risk of an LNG Terminal” inGlickman, Theodore, and Michael Gough, eds: Readings in Risk, Washington, DC, Resources for the Future, 1990. (Hereafter, RR.)
  5. SKIM: Morgan, G., “Choosing and Managing Technology-Induced Risk” in RR.

Extra: Decision Analysis Problems Q. 3 and 4, in Keeney et al.

Extra: Work through KH, Problem 8-6

Week 7: Health Risk Assessment3/8/10

  1. Wilson, R., “Ensuring Sound Science in the Courts,” Technology in Society (2004) 26:501-522
  2. Rodricks, J. and Taylor, M., “Application of Risk Assessment to Food Safety DecisionMaking.” in RR.
  3. Viscusi, W.K. “The New Cigarette Paternalism.” Regulation (2002/3) 25: 58-64.
  4. SKIM: Falba, T., and Busch, H., “Survival Expectations of the Obese: Is Excess Mortality Reflected in Perceptions?” Obesity Research (2005) 13: 754-761.
  5. SKIM: Schoenbaum, M. “Do Smokers Understand the Mortality Effects of Smoking? Evidence from the Health and Retirement Survey.” American Journal of Public Health (1997) 87: 755-759.

TA Session: Methods for Data Analysis Presentation, Time TBD

Week 8: Risk Perception3/22/10

  1. Slovic, P., Fischhoff, B. and Lichtenstein, “Rating the Risks.” in RR.
  2. Sunstein, C. “The Paralyzing Principle,” Regulation (Winter2002-2003), 32-37
  3. Post, D. “The Precautionary Principle and Risk Assessment in International Food Safety: How the World Trade Organization Influences Standards” Risk Analysis(2006) 26:1259-1273.
  4. Kasperson, R., Jhaveri, N. and Kasperson, J. “Stigma and the Social Amplification of Risk” in Flynn, Slovic and Kunreuther,Risk Media and Stigma (London:Earthscan)
  5. SKIM: Benjamin, D., Dougan, W., “Individuals’ Estimates of the Risks of Death: Part I – A Reassessment of the Previous Evidence,” Journal of Risk and Uncertainty 15: 115-133.
  6. SKIM: Leiserowitz, A. “American Risk Perceptions: Is Climate Change Dangerous?” Risk Analysis (2005) 25: 1433-1442.

Due: Project Presentation #2

Extra: KH, Problem 10-9

Risk Management and Communication

Week 9: Valuation of Risk3/29/10

  1. Mankiw, G. Principles of Economics (Mason, OH: South-Western Cengage Learning) 2008. Ch. 7, pp. 137-142.
  2. Boardman, T. et al. Cost-Benefit Analysis: Concepts and Practice (UpperSaddle River, NJ: Prentice-Hall) 2001. Chap. 14.
  3. Viscusi, K. and Aldy, J. “The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World.” Journal of Risk and Uncertainty 27:5-76, 2003.

Due: Q. 1 of Boardman et al. Chap. 14.

Extra: KH, Problem 9-1

Week 10: Risk Communication4/5/10

  1. Slovic, P., “Trust, emotion, sex, politics, and science: Surveying the risk-assessmentbattlefield.” Risk Analysis 19 (2) 1999
  2. Flynn, J. Slovic, P. & Mertz, C.K. “The Nevada Initiative: A risk communicationfiasco.” Risk Analysis 13 (5) 1993. (Reprinted in Risk, Media, and Stigma, Flynn, Slovic, Kunreuther, eds.)
  3. Keller, C., Siegrist, M. and Gutscher, H. “The Role of the Affect and AvailabilityHeuristics in Risk Communication” Risk Analysis (2006) 26, 631-639.

Week 11: Project Presentation #34/12/10

Week 12: Terrorism Risk4/19/10

  1. Kunreuther, H. and Heal, G. “Interdependent Security.” Journal of Risk and Uncertainty 26 (2-3), p. 231-49.
  2. Lakdawalla, D.N., Zanjani, G. “Insurance, Self-Protection, and the Economics of Terrorism.”Journal of Public Economics 89 (9-10), 2005. p. 1891-1905.
  3. Sunstein, C. “Terrorism and Probability Neglect.” Journal of Risk and Uncertainty 26 (2-3), p. 121-36.
  4. SKIM: Heal, G. and H. Kunreuther (2005). "IDS Models of Airline Security." Journal of Conflict Resolution49(2): 201-17.

Week 13: In-Class Final Exam4/26/10

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