CHAPTER
RISK AND VULNERABILITY
3
CHAPTER SUMMARIES
Citizens collectively face risks from a range of large-scale hazards. Risk is the interaction of hazard consequences
and likelihood. Using this formula, hazards are compared and ranked, allowing disaster managers to determine
the most effective and appropriate treatment options. The goal of risk analysis is a standard measurement of likelihood and consequence, whether quantitative or qualitative. Consequence describes hazard effects on humans, built
structures, and the environment. Losses may be direct or indirect, and tangible or intangible. Hazard likelihood and
consequences can change considerably over time. These trends can be incremental or extreme, and can occur suddenly or over centuries. Risk evaluation is conducted to determine the relative seriousness of risks, and to compare
and prioritize them. Disaster managers must decide what risks to treat, what risks to prevent at all costs, and what
risks to disregard. These decisions are based on risk acceptability. The personal factors that dictate risk acceptability are guided by risk perception. Vulnerability is a measure of the propensity of an object, area, individual, group,
community, country, or other entity to incur the consequences of a hazard, and is the result of physical, social,
economic, and environmental factors.
Key Terms: consequence; direct and indirect losses; likelihood; qualitative risk analysis; quantitative risk analysis;
risk; risk evaluation; risk matrix; risk perception; tangible and intangible losses; vulnerability.
INTRODUCTION
Risk is an unavoidable part of life, affecting all people without exception, irrespective of geographic or
socioeconomic limits. Each choice we make as individuals and as a society involves specific, often
unknown, factors of risk, and full risk avoidance is generally impossible.
On the individual level, each person is primarily responsible for managing the risks he or she faces
as he or she sees fit. For some risks, management may be obligatory, as with automobile speed limits
and seatbelt usage. For other personal risks, such as those associated with many recreational sports,
individuals are free to decide the degree to which they will reduce their risk exposure, such as by wearing a helmet or other protective clothing. Similarly, the risk of disease affects humans as individuals,
and as such is generally managed by individuals. By employing risk reduction techniques for each life
hazard, individuals effectively reduce their vulnerability to those hazard risks.
As a society or a nation, citizens collectively face risks from a range of large-scale hazards. Although
these hazards usually result in fewer total injuries and fatalities over the course of each year than individually faced hazards, they are considered much more significant because they have the potential to
result in many deaths, injuries, or damages in a single event or series of events. In fact, some of these
hazards are so great that, if they occurred, they would result in such devastation that the capacity of
local response mechanisms would be overwhelmed. This, by definition, is a disaster. For these
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large-scale hazards, many of which are identified in chapter 2, vulnerability is most effectively reduced
by disaster risk management efforts collectively, as a society. For most of these hazards, it is the government’s responsibility to manage, or at least guide the management of, disaster risk reduction measures.
And when these hazards do result in disaster, it is likewise the responsibility of governments to respond
to them and aid in the recovery that follows.
TWO COMPONENTS OF RISK
Chapter 1 defines risk as the interaction of a hazard’s consequences with its probability or likelihood.
This definition and similar derivatives are used in virtually all technical documents associated with risk
management. Clearly defining the meaning of “risk” is important, because the term often carries markedly different meanings for different people (Jardine and Hrudey 1997). One of the simplest and most
common definitions of risk, preferred by many risk managers, is displayed by the equation stating that
risk is the likelihood of an event occurring multiplied by the consequence of that event, were it to occur:
Risk = Likelihood × Consequence (Ansell and Wharton 1992).
LIKELIHOOD
“Likelihood” can be given as a probability or a frequency, whichever is appropriate for the analysis
under consideration. There are multiple variants to how probability and frequency are displayed, but
these all typically refer to the same absolute value. “Frequency” communicates the number of times an
event will or is expected to occur within an established sample size over a specific period of time. Quite
literally, it tells how frequently an event occurs. For instance, the frequency of auto accident deaths in
the United States equates to approximately one death per 81 million miles driven (Dubner and Levitt
2006).
In contrast to frequency, “probability” refers to single-event scenarios. Its value is expressed as a
number between zero and one, with zero signifying a zero chance of occurrence and one signifying
certain occurrence. Using the auto accident example, in which the frequency of death is one per 81
million miles driven, we can say that the probability of a random person in the United States dying in
a car accident equals 0.000001 if he or she was to drive 81 miles.
When disaster risk managers use a standardized method of calculating risk utilizing this formula
across all identified hazards, comparison and ranking by severity is possible. If hazard risks are instead
analyzed and described using different methods and/or terms of reference for each hazard, or even for
groups of hazards, comparison and ranking becomes very difficult when prioritizing how limited
resources will be dedicated to risk reduction efforts.
This ranking of risks, or “risk evaluation,” is what allows disaster risk managers to determine which
treatment options, whether mitigation or preparedness, or both, are the most effective, most appropriate, and will provide the most benefit per unit of cost. Not all hazard risks are equally serious, and risk
analysis is what enables an informed decision-making process.
Without exception, governments have limited funds available to manage the hazard risks they face.
While reducing the risk of one hazard may be less expensive or more easily implemented than reducing
the risk of another, cost and ease alone may not be valid reasons to choose a treatment option. Hazards
that have the potential to inflict great consequences (in terms of lives lost or injured, or property
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damaged or destroyed) and/or occur with great frequency pose the greatest overall threat. Considering
budgetary limits, disaster risk managers should generally treat those hazard risks that pose the greatest
threat first. Fiscal realities often drive this analytic approach, resulting in situations in which certain
hazard risks in the community’s overall risk profile are mitigated, while others are not addressed to any
degree at all.
The goal of risk analysis is therefore to establish a standard, comparable measurement of the likelihood and consequence factors for each hazard identified. The different mechanisms through which
values are derived for a hazard’s likelihood and consequences fall into two general categories of analysis: quantitative analysis and qualitative analysis. Quantitative analysis draws upon mathematical and/
or statistical data to achieve numerical descriptions of risk. Qualitative analysis also relies upon mathematical and/or statistical data, but instead uses defined terms (words) to describe and categorize the
hazard risk likelihood and consequence value outcomes. And while quantitative analyses provide specific data points (e.g., dollars, probability, frequency, or number of injuries/fatalities), qualitative analyses consider ranges of possible values for which each qualifier is assigned. It is often cost- and
time-prohibitive, and often not necessary, to determine the exact quantitative measures for the likelihood and consequence factors of a hazard’s risk. Qualitative measures are much easier to determine and
typically require less time, money, and, most important, expertise, to conduct. For this reason, it is the
most commonly encountered method of assessment in practice. The following section provides a general explanation of how these two types of measurements apply to the likelihood and consequence
components of risk.
Quantitative Representation of Likelihood
As previously stated, likelihood can be derived as either a frequency or a probability. A quantitative
system of measurement exists for each. For frequency, this number indicates the number of times a
hazard is expected to result in an actual event over a chosen time frame. For example, a particular area
might experience flooding four times per year, one time per decade, ten times each month, and so on as
calculated. Probability considers the same base data, but expresses the outcome as a measure that lies
between 0 and 1 or as a percentage value that falls between 0 percent and 100 percent. In both cases,
this represents the chance of occurrence. For example, if an area has experienced four flood events in
the past 200 years where floodwaters reached 20 feet above the base flood elevation, then this severity
of flooding has a one-in-fifty chance of occurring in any given year, or a probability of 2 percent, or
0.02, each year. This is also considered to be a 50-year flood. An event that is expected to occur two
times in the next three years has a 0.66 probability each year, or a 66 percent chance of occurrence, and
is much more probable than the 50-year event.
Qualitative Representation of Likelihood
Likelihood can also be expressed using qualitative measurement, applying words to describe the chance
of occurrence. Each word or phrase represents a pre-established range of possibilities. For instance, the
likelihood of a particular hazard resulting in an emergency or disaster event might be described as follows using a qualitative system of likelihood:
• Certain: >99 percent chance of occurring in a given year (one or more occurrences per year)
• Likely: 50–99 percent chance of occurring in a given year (one occurrence every one to two
years)
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• Possible: 5–49 percent chance of occurring in a given year (one occurrence every two to twenty
years)
• Unlikely: 2–5 percent chance of occurring in a given year (one occurrence every twenty to fifty
years)
• Rare: 1–2 percent chance of occurring in a given year (one occurrence every fifty to one hundred
years)
• Extremely rare:
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