Risk Analysis and Uncertainty in Flood Damage Reduction Studies (2000) / Chapter Skim
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Risk Analysis Concepts and Terms
Risk Analysis Concepts and Terms
Pages 40-50
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From page 40... ...
Still others relate to the economic value of floodplain property, the probability distribution used to describe flood frequency, or the costs of alternative transportation modes. The Corps has made significant strides in the use of risk analysis.
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From page 41... ...
Natural variability is also sometimes referred to as external, objective, random, or stochastic uncertainty. Knowledge uncertainty sometimes called epistemic uncertaintydeals with a lack of understanding of events and processes, or with a lack of data from which to draw inferences; by assumption, such lack of
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From page 42... ...
IACWD (1981) provides an example of the distinction between natural variability and knowledge uncertainty found in flood-frequency calculations, wherein the frequency curve (i.e., probability distribution)
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. In contrast, uncertainty in the mean annual flow parameter, treated as knowledge uncertainty, introduces a systematic effect
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From page 44... ...
uncertainty should be addressed with sensitivity analysis (NRC, 19941; however, this view is not unanimously shared by the scientific community. Another type of knowledge uncertainty might be called decision model uncertainty, which describes an inability to understand the objectives that society holds important or to understand how alternative projects or designs should be evaluated.
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From page 45... ...
uncertainty, neither document discusses fundamental differences between natural variability and knowledge uncertainty. The distinction between natural variability and knowledge uncertainty is particularly important for flood damage calculations of expected annual damage (EAD)
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From page 46... ...
Flood damage reduction studies use "risk-based analysis" and "risk and uncertainty." Rehabilitation studies have often used "riskbased analysis." Environmental and ecosystem restoration studies typically use "risk and uncertainty analysis." "Risk analysis" is the more general term that includes risk assessment and risk management (NRC, 1983) and sometimes also includes hazard identification, risk characterization, and risk communication (NRC, 1994, 1996~.
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From page 47... ...
. Supplemental criteria are the conditional nonexceedance probability for various design events and the expected annual damages (EAD)
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From page 48... ...
Does risk analysis aid decision making in flood damage reduction studies? The new risk and uncertainty analysis method developed for flood damage reduction studies is different from earlier methods in that it includes a wider range of parameter uncertainties in the stochastic Monte Cario analysis that generates expected project damages.
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From page 49... ...
(AEP) probabilities Estimated Annual Damage auantiles ' The current criterion for ecosystem restoration projects is cost effectiveness or incremental cost analysis.
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From page 50... ...
The question has arisen whether adding parameter uncertainty to flood damage reduction calculations leads to potentially different project decisions or to greater insight into project performance. Some have noted that because the primary decision criterion is average expected annual damages, parameter uncertainty should have little impact.
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