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Hazard management and risk design by optimal statistical analysis

Author

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  • Cheng-Wu Chen
  • Kevin Liu
  • Chun-Pin Tseng
  • Wen-Ko Hsu
  • Wei-Ling Chiang

Abstract

Elicitation methods are used in decision making with respect to risk hazards to allow a researcher to infer the subjective utilities of outcomes from the observed preferences of an individual. A questionnaire method is presented, in this study, which takes into account the inevitable distortion of preferences by random errors and minimizes the effect of such errors. Under mild assumptions, the method for eliciting the utilities of many outcomes is a three-stage procedure. First, the questionnaire is utilized to elicit responses from which a subjective score is defined. Second, individual risk factors are discussed. Finally, the regression model presents individual risk preferences given the overall organizational risk culture, risk management policy, risk identification, and risk analysis. This paper addresses how company managers face risk and their tolerance of risk with respect to risk management. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Cheng-Wu Chen & Kevin Liu & Chun-Pin Tseng & Wen-Ko Hsu & Wei-Ling Chiang, 2012. "Hazard management and risk design by optimal statistical analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 64(2), pages 1707-1716, November.
    • Handle: RePEc:spr:nathaz:v:64:y:2012:i:2:p:1707-1716
    DOI: 10.1007/s11069-012-0329-8
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    References listed on IDEAS

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    1. Chen, C.W. & Chiang, W.L. & Hsiao, F.H., 2004. "Stability analysis of T–S fuzzy models for nonlinear multiple time-delay interconnected systems," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 66(6), pages 523-537.
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    3. Chun-Pin Tseng & Cheng-Wu Chen, 2012. "Natural disaster management mechanisms for probabilistic earthquake loss," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 60(3), pages 1055-1063, February.
    4. Chun-Pin Tseng & Cheng-Wu Chen & Yu-Ping Tu, 2011. "A new viewpoint on risk control decision models for natural disasters," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 59(3), pages 1715-1733, December.
    5. Hongjian Zhou & Jing’ai Wang & Jinhong Wan & Huicong Jia, 2010. "Resilience to natural hazards: a geographic perspective," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 53(1), pages 21-41, April.
    6. Cheng-Wu Chen & Chun-Pin Tseng, 2012. "Default risk-based probabilistic decision model for risk management and control," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 63(2), pages 659-671, September.
    7. Wen-Ko Hsu & Chun-Pin Tseng & Wei-Ling Chiang & Cheng-Wu Chen, 2012. "Risk and uncertainty analysis in the planning stages of a risk decision-making process," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 61(3), pages 1355-1365, April.
    8. Wen-Ko Hsu & Pei-Chiung Huang & Ching-Cheng Chang & Cheng-Wu Chen & Dung-Moung Hung & Wei-Ling Chiang, 2011. "An integrated flood risk assessment model for property insurance industry in Taiwan," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 58(3), pages 1295-1309, September.
    9. Han-Chung Yang & Cheng-Wu Chen, 2012. "Potential hazard analysis from the viewpoint of flow measurement in large open-channel junctions," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 61(2), pages 803-813, March.
    10. Jeng-Wen Lin & Cheng-Wu Chen & Cheng-Yi Peng, 2012. "Kalman filter decision systems for debris flow hazard assessment," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 60(3), pages 1255-1266, February.
    11. Bih-Yaw Shih & Chen-Yuan Chen & Chung-Wei Chen & I Hsin, 2012. "Using Lego NXT to explore scientific literacy in disaster prevention and rescue systems," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 64(1), pages 153-171, October.
    12. Raviv, Artur, 1979. "The Design of an Optimal Insurance Policy," American Economic Review, American Economic Association, vol. 69(1), pages 84-96, March.
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    1. Liu, Quanlong & Peng, Yumeng & Li, Zhiyang & Zhao, Pan & Qiu, Zunxiang, 2021. "Hazard identification methodology for underground coal mine risk management - Root-State Hazard Identification," Resources Policy, Elsevier, vol. 72(C).

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