A new scientific framework for quantitative risk assessments

Terje Aven

International Journal of Business Continuity and Risk Management, 2009, vol. 1, issue 1, 67-77

Abstract: Many analysts consider Quantitative Risk Assessment (QRA) to be an application of statistics and founded on the natural science paradigm. However, if the goal is the accurate estimation of some true underlying risk parameters, QRA fails as a scientific method. The alternative is to consider QRA to be a method for describing uncertainties. The purpose of this paper is to present and discuss a new scientific framework founded on such a perspective. The framework is based on knowledge-based (subjective) probabilities to express uncertainties about unknown quantities, as well as on the qualitative assessment of uncertainties extending beyond the probabilistic analysis. Risk is viewed as the combination of events/consequences and associated uncertainties. Critical methodological issues, such as model uncertainty, are clarified. Several examples are included to motivate and explain the basic ideas of the framework.

Keywords: quantitative risk assessment; scientific framework; uncertainties. (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (3)

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