Hazard management and risk design by optimal statistical analysis

Cheng-Wu Chen (), Kevin Liu, Chun-Pin Tseng, Wen-Ko Hsu and Wei-Ling Chiang

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, 2012, vol. 64, issue 2, 1707-1716

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

Keywords: Risk hazard assessment; Computer aided; Financial insurance (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/s11069-012-0329-8

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