Critical Asset and Portfolio Risk Analysis: An All‐Hazards Framework

Bilal M. Ayyub, William L. McGill and Mark Kaminskiy

Risk Analysis, 2007, vol. 27, issue 4, 789-801

Abstract: This article develops a quantitative all‐hazards framework for critical asset and portfolio risk analysis (CAPRA) that considers both natural and human‐caused hazards. Following a discussion on the nature of security threats, the need for actionable risk assessments, and the distinction between asset and portfolio‐level analysis, a general formula for all‐hazards risk analysis is obtained that resembles the traditional model based on the notional product of consequence, vulnerability, and threat, though with clear meanings assigned to each parameter. Furthermore, a simple portfolio consequence model is presented that yields first‐order estimates of interdependency effects following a successful attack on an asset. Moreover, depending on the needs of the decisions being made and available analytical resources, values for the parameters in this model can be obtained at a high level or through detailed systems analysis. Several illustrative examples of the CAPRA methodology are provided.

Date: 2007
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https://doi.org/10.1111/j.1539-6924.2007.00911.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:27:y:2007:i:4:p:789-801

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