Reply to hosticka on risk- and cost-benefit analysis

Risk Analysis, 2006

The "human health impacts assessment" described by Cox and Popken (this issue) is intended to be a benefit-risk tool that avoids pitfalls of using expert judgments for policy analysis or during strict application of the precautionary principle in risk management. The proposed benefit-risk calculation uses numerous assumptions and suppositions to calculate a ratio of quality-adjusted life years (QALYs) lost for the number of human illness days prevented by the use of a food-animal antimicrobial drug, to the number of human illness days caused by the use of the antimicrobial drug. Assumptions about data-e.g., expert judgments on the representativeness of parameter estimates-are commonly used in risk assessment and risk management, including Cox and Popken's method. Cox and Popken apply the technique to specific examples of enrofloxacin and macrolides antimicrobial drugs, sometimes used in broiler chickens for human food. Although enthusiastically portrayed as a straightforward calculation of QALYs lost for two decision alternatives, Cox and Popken were silent on the pivotal expert judgment subsumed in their method: quality weights for illnesses caused by antimicrobial-resistant and antimicrobial-sensitive microbes are tacitly assumed to be equal. Yet, the costs in terms of prolonged illness, additional medications, repeat medical visits, and dread of more serious sequelae are expected to differ substantially for antimicrobial-resistant versus antimicrobial-sensitive illnesses. Despite their enthusiasm to the contrary, the "human health impacts assessment" by Cox and Popken is not immune from expert judgments in risk management.

2000

Critical Reviews in Food Science and Nutrition, 2009

Methodology for Risk-Benefit Analysis in Research, 2024

Risk-benefit analysis in the context of research activities has recently become a mandatory exercise. It is an integral part of the more extensive exercise, the scientific and ethical review for research approval and subsequent monitoring and evaluation exercises. However, how to undertake the process remains a largely subjective process that results in somewhat 'incomplete' inventories of potential risks and benefits for many research activities. There is also the challenge of computing an overall study risk-benefit score when objective and subjective measures of risks, benefits, severity, and magnitude are involved. This study employed the integrative literature review methodology to summarize past empirical and theoretical literature to provide a more comprehensive understanding of a phenomenon. The result is a simple, concise, and practical guide for identifying research risks and benefits, the computation of risk scores, benefit scores, and the overall risk-benefit score in a research activity. These scores are subsequently utilized to compute the study's overall risk-benefit analysis score. This step-by-step process for the computation of a risk-benefit ratio will introduce clarity in the process of risk-benefit analysis in order to help ascertain if specific risk probabilities and their severity have been correctly assessed. Conversely, the approach is also helpful in ascertaining if study benefits and their magnitude have been adequately assessed and rated.

SSRN Electronic Journal, 2016

Cost-Benefit Analysis (CBA) is a tool for assessing the welfare effects of changes in regulatory and investment interventions. While in many ways an effective approach, a significant drawback of CBA, however, is that it relies on estimates for variables that cannot be predicted with complete accuracy. As such, expected outcomes generated by CBA, such as financial and economic net present values (NPVs), incorporate a degree of risk and uncertainty. It is therefore critical that CBA is based on transparent assumptions about the nature of risk and uncertainty affecting key variables: CBA cannot contribute to rational decision-making unless the distribution of outcomes is clear, and the effect on forecast reliability understood. Real-world risk and uncertainty generate numerous ex-ante outcomes at the point of appraisal. Correctly assessing risk and uncertainty is therefore one of the most difficult challenges decisionmakers face in applying the results of CBA. This report offers a systematic approach to the incorporation of risk and uncertainty in CBA. The primary objectives are to review the professional literature on risk and uncertainty; to provide a methodology for taking account of risk and uncertainty in CBA; and to suggest guidelines for the interpretation and application of CBA results in the decision-making process. The treatment of risk and uncertainty are clearly addressed in the CBA guidelines of most OECD countries, although approaches vary. The simplest procedures are based on sensitivity analysis, as applied to a deterministic base case. More comprehensive analysis is based on assumed probability distributions for the variables concerned. The CBA guidelines of multilateral financial institutions and a number of advanced economies (Australia, Canada, France, the UK, the US and the European Union) call for sensitivity analysis on a project-by-project basis, identifying specific long-term risks and uncertainties associated with the assumptions and values used in appraisal and evaluation. Still greater insight into the impact of risk and uncertainty on expected regulatory outcomes can be gained from a probabilistic modeling of variable distributions and their inter-dependencies. A Monte Carlo simulation is therefore recommended alongside sensitivity analysis, where data, time and budget permit. ACKNOWLEDGEMENTS This study was financed by Environment Canada. The report was prepared by Cambridge Resources International Inc. under Formulation of Best Professional Practice for Incorporating Risk and Uncertainty into CBA Analysis of Environmental Regulations-Contract Number: 3000597037. The comments and suggestions of Mr. Alexandre Drzymala during the preparation of this paper are greatly appreciated. The opinions expressed in this publication are those of the authors alone and do not necessarily reflect the views of Environment Canada, or the Government of Canada.

European Journal of Operational Research, 2018

This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain. Highlights • Create a connection between risk analysis and decision theory • Pave the way to the use of modern decision criteria in system risk assessment • All formats of Kaplan and Garrick's risk triplets have a decision theory counterpart • Promote exchanges between two fields that benefit Decision Analysis practice

Gaia: Okologische Perspektiven in Natur-, Geistes- und Wirtschaftswissenschaften

1992

The best check on the preposterous claims of crisis rhetoric is an appreciation of the nature of risk analysis and how it functions in argumentation. The use of risk analysis is common in policy debate. While the stock issues paradigm focused the debate exclusively on the affirmative case, the advent of policy systems analysis has transformed debate into an w,aluation of competing policy systems. Unfortunately, the illusion of objectivity masks several serious problems with risk analysis as it is presently used in academic debate. Risk analysis artificially assigns probability to arguments and overvalues arguments with large impacts. Four suggestions can dramatically improve the use of risk analysis in policy debate: (1) some risks are so trivial that they are not meaningful; (2) the increment of risk must be considered; (3) debaters must not become enslaved to large impacts; and (4) debaters must rehabilitate the importance of uniqueness arguments in debate. (Twenty-one notes are included.) (RS)

Journal of Public Affairs, 2015

The goal of this paper is to deliver a concise form of discussion on the use of cost‐benefit analysis (CBA) in environmental policy formulation in the scholarships. There have been several critiques from environmental/legal economists and even from economists who are in favor of the use of CBA. The critiques of CBA can be reduced to one statement: ‘numbers don't tell us everything’. The implication from the critiques of CBA is that these evoke cautiousness or wariness against an economized calculation of CBA in the environment policy. CBA can be a valuable tool when it is carefully restricted from being used in policies such as environment, health, and natural resource policy in which inherent incommensurability exists. Copyright © 2015 John Wiley & Sons, Ltd.

1986

2000

Knowledge Management Strategies and Applications, 2017

The aim of this chapter is to critically reflect definitions of hazard, risk, and risk perception and their assessments used in different scientific disciplines and give examples of the potential implications for scientific discussions, knowledge management, and risk communication. Scientists with backgrounds in public health, psychology, environmental health, occupational health, engineering, sociology, and medicine were asked for a definition of hazard, risk, risk assessment, and risk perception seen from their specific scientific disciplines. Hazard is generally seen as an adverse event or condition. For most risk definitions, probability and severity are important aspects. Often a quantification of risk is desired, whereas risk perception is seen as a subjective appraisal and a cognitive construct. As risk perceptions are based on a combination of knowledge and individual values and affects, it may not provide a reliable guidance for risk management decisions on a societal level. Discipline differences are mainly connected to terminology and interpretation of key concepts, but the differences are based on different tasks and perspectives. For dealing with controversies in science across disciplines, an acceptance and appreciation of terminology and perspectives from different scientific disciplines are needed to ensure a transparent risk assessment process.

Risk Analysis, 1982

This paper reviews the contributions of philosophy and the social and behavioral sciences to risk analysis. It concludes that philosophical, social, and behavioral research can contribute to the resolution of complex risk issues in at least four areas: (i) comparative risk analysis; (ii) the use of risk-related scientific information in the decision-making process; (iii) risk perception; and (iv) institutional and organizational features of the risk-management system. KEY WORDS risk; social and behavioral sciences; philosophy.