Course Syllabus: PPD 587
Risk Analysis (4 Units)
Catalogue Description
Concepts of risk analysis, risks in engineered systems, environmental risks, security risks;
methods of risk analysis, fault trees and event trees; quantification of probabilities, use of
data, models, and expert judgments; risks and decisions, interlinking risk analysis with
risk management; applications to homeland security decisions.
Recommended preparation: MATH 108 or MATH 116
Instructor – Darius Lakdawalla
Office:
Office Hours:
Email:
Telephone:
UGW 100D
By appointment (see below, in “Project Presentations”)
dlakdawa@healthpolicy.usc.edu
(213) 538 8736
Teaching Assistant – Jacki Chou
Office Hours:
Email:
Telephone:
By appointment
Jacki.Chou@gmail.com
TBD
Class Time and Location
Class Time:
Mondays 2 to 5:20 PM
Location:
DEN Classroom
Readings
All assigned readings will be posted on Blackboard in pdf format.
Optional Texts
Kammen, D.H., and Hassenzahl, D,M. Should We Risk It? New Haven: Princeton
University Press, 1999.
Glickman, Theodore, and Michael Gough, eds. Readings in Risk. Washington, DC:
Resources for the Future 1990.
Students may find either or both of the texts above useful as additional reference
material.
Syllabus
PPD 587
Overview
This class is an introduction to risk analysis in several fields, including engineering risk
analysis, environmental risk analysis, and security risk analysis. Examples will come
from health care, product safety, national security, and other areas of public policy.
Students will be introduced the concepts and methods of risk analysis. Students will also
learn how to apply risk analysis in real world settings.
Objectives




Understand the basic concepts of risk analysis and the relationship between
probability theory and modeling, risk analysis, and decision analysis
Understand how to interpret probability and probabilistic modeling, in the
evaluation of risk
Learn how to understand and interpret the basic tools of risk analysis – fault trees,
event trees, and simulation models
Understand the issues surrounding the use of risk analysis in decision making
Class Format
The class will be primarily in a lecture format. In addition, students will conduct a
simple risk analysis project of their own choice and present progress reports throughout
the class. Off-campus students can participate via Webex (presentations) and on the
discussion board. Assigned readings will serve as preparation for lectures, and assigned
problem sets will reinforce lecture material. There will be a written Final Exam
administered in-class, during the final meeting. Off-campus students may take it at a
proctored site, or make other arrangements with the instructor.
Syllabus Updates
Updates may be made to the syllabus over the course of the semester. The most up-todate version is always posted to the “Syllabus” section of Blackboard. You should use
this version as your primary source of guidance for course content.
Tests and Grades
Grades will be assigned on the basis of homework assignments (10%), the quality of the
three project presentations (45%), and the final exam (45%).
Assignments
The required homework assignments are those designated as being “DUE” in the
syllabus. Assignments denoted as “EXTRA” are optional and will not be graded. For
“DUE” assignments to count, they must be turned in to the Grader or the Instructor
before the start of class on the given day. No assignment will be accepted any later than
2
Syllabus
PPD 587
this. In the case of illness, documented by a signed and dated physician’s note, the
assignment will be waived, and the homework grade computed on the basis of the
remaining assignments.
Project Presentations
Students will form groups, each of which will be required to deliver three project
presentations in class, during the course of the semester. Groups will be formed toward
the start of the semester. Each group has the option of meeting with the Instructor to
discuss any or all of their presentations. These meetings will take place by appointment,
as indicated above. To ensure fairness to all students, every group will have a total of no
more than 90 minutes of cumulative time with the instructor. This can be taken in the
form of 3 30-minute meetings, or in any other configuration desired by the group.
Each presentation will be graded according to how well it responds to the written
assignment. In general, all presentations will be judged on the basis of: slide content,
presentation style, and responses to questions. Each group may nominate one or more
members to deliver each presentation, but all members of the group will receive a
uniform grade.
Final Exam
An in-class final exam will be given during the last class period of the semester. Students
will not be allowed to consult books, notes, electronic resources, or any other material
during the test. Distance learning students will be required to take this exam at a
proctored location on the same day. In the case of illness, documented by a signed and
dated physician’s note, the final exam requirement will be waived for the student, and the
course grade computed on the basis of homework assignments and project presentations.
TA Sessions
During the course of the semester, there will be two optional sessions run by the
Teaching Assistant, to reinforce concepts related to the assignments. These will be
scheduled so as to accommodate as many students as possible. They will also be
videotaped and made available on the web for students who are unable to attend inperson.
Disability Services and Programs Statement
Any student requesting academic accommodations based on a disability is required to
register with Disability Services and Programs (DSP) each semester. A letter of
verification for approved accommodations can be obtained from DSP. Please be sure the
letter is delivered to me (or to the TA) as early in the semester as possible. DSP is
located in STU 301 and is open 8:30 a.m. – 5:00 p.m., Monday through Friday. The
phone number for DSP is (213) 740-0776.
3
Syllabus
PPD 587
Lecture Schedule - Risk Analysis PPD 587
Spring 2013
Framework for risk analysis and risk management
Week 1: What is risk analysis?
1/14/13
1. Kunreuther, H. “Risk Analysis and Risk Management in an Uncertain World.”
Risk Analysis, August 2002.
2. Baron, D. “The Market and Nonmarket Environments” Chap.1 in Business and
the Environment (Prentice-Hall, 2000)
3. Kammen, D.H., and Hassenzahl, D,M. Should We Risk It? New Haven:
Princeton University Press, 1999, Chapter 1. (Hereafter, KH.)
Week 2: Formulating decision problems
1/28/13
1. Keeney, R. Value-Focused Thinking (Cambridge: Harvard UniversityPress),
Chap. 1.
2. Keeney, R. and McDaniels, T. “A Framework to Guide Thinking and Analysis
Regarding Climate Change Policies” Risk Analysis, December 2001 (pp. 9891000).
3. Clemen, R. and Reilly R. Making Hard Decisions with Decision Tools (Pacific
Grove, CA: Duxbury). Chap. 2 “Elements of Decision Problems.”
Due: Chemcare Homework Problem
Week 3: Statistics for Risk Analysis
2/4/13
1. KH, Chapter 3 & 4
Extra: 1 page write-up of Q. 1, 2, and 3, from Google problem at end of Baron, Ch.1.
Week 4: Uncertainty and Limited Information
2/11/13
1. KH, Chapter 3&4 (Continued)
Due: Project Presentation #1
Week 5: Applying decision analysis
2/25/13
1. Clemen, R. and Reilly R. Making Hard Decisions with Decision Tools (Pacific
Grove, CA: Duxbury). Chap. 3 “Structuring Decisions.”
2. Boardman, T. et al. Cost-Benefit Analysis: Concepts and Practice (Upper Saddle
River, NJ: Prentice-Hall) 2001. Chapter 1.
Due: Freemark Abbey Winery Case
TA Session: Review Freemark Abbey Winery Case, Date and Time TBD
4
Syllabus
PPD 587
Risk assessment and risk perception
Week 6: Technological Risk Assessment
3/4/13
1. Perrow, C. Normal Accidents New York: Basic Books 1984. “Introduction.”
2. Morgan, G., “Risk Analysis and Management,” Scientific American, July 1993.
3. Smith, C. and Borgonovo, E. “Decision Making During Nuclear Power Plant
Incidents—A New Approach to the Evaluation of Precursor Events” Risk
Analysis 2007, 27:1027-43.
4. SKIM: Keeney, R. et. al., “Assessing the Risk of an LNG Terminal” in
Glickman, Theodore, and Michael Gough, eds: Readings in Risk, Washington,
DC, Resources for the Future, 1990. (Hereafter, RR.)
5. SKIM: Morgan, G., “Choosing and Managing Technology-Induced Risk” in RR.
Extra: Decision Analysis Problems Q. 3 and 4, in Keeney et al.
Extra: Work through KH, Problem 8-6
Week 7: Health Risk Assessment
3/11/13
1. Wilson, R., “Ensuring Sound Science in the Courts,” Technology in Society
(2004) 26: 501-522
2. Rodricks, J. and Taylor, M., “Application of Risk Assessment to Food Safety
Decision Making.” in RR.
3. Viscusi, W.K. “The New Cigarette Paternalism.” Regulation (2002/3) 25: 5864.
4. SKIM: Falba, T., and Busch, H., “Survival Expectations of the Obese: Is Excess
Mortality Reflected in Perceptions?” Obesity Research (2005) 13: 754-761.
5. SKIM: Schoenbaum, M. “Do Smokers Understand the Mortality Effects of
Smoking? Evidence from the Health and Retirement Survey.” American Journal
of Public Health (1997) 87: 755-759.
Week 8: Risk Perception
3/25/13
1. Slovic, P., Fischhoff, B. and Lichtenstein, “Rating the Risks.” in RR.
2. Sunstein, C. “The Paralyzing Principle,” Regulation (Winter 2002-2003), 32-37
3. Post, D. “The Precautionary Principle and Risk Assessment in International Food
Safety: How the World Trade Organization Influences Standards” Risk Analysis
(2006) 26:1259-1273.
4. Kasperson, R., Jhaveri, N. and Kasperson, J. “Stigma and the Social
Amplification of Risk” in Flynn, Slovic and Kunreuther, Risk Media and Stigma
(London:Earthscan)
5. SKIM: Benjamin, D., Dougan, W., “Individuals’ Estimates of the Risks of
Death: Part I – A Reassessment of the Previous Evidence,” Journal of Risk and
Uncertainty 15: 115-133.
6. SKIM: Leiserowitz, A. “American Risk Perceptions: Is Climate Change
Dangerous?” Risk Analysis (2005) 25: 1433-1442.
Due: Project Presentation #2
Extra: KH, Problem 10-9
5
Syllabus
PPD 587
Risk Management and Communication
Week 9: Valuation of Risk
4/1/13
1. Mankiw, G. Principles of Economics (Mason, OH: South-Western Cengage
Learning) 2008. Ch. 7, pp. 137-142.
2. Boardman, T. et al. Cost-Benefit Analysis: Concepts and Practice (Upper Saddle
River, NJ: Prentice-Hall) 2001. Chap. 14.
3. Viscusi, K. and Aldy, J. “The Value of a Statistical Life: A Critical Review of
Market Estimates Throughout the World.” Journal of Risk and Uncertainty 27:576, 2003.
Due: Q. 1-3 of Boardman et al. Chap. 14.
Week 10: Risk Communication
4/8/13
1. Slovic, P., “Trust, emotion, sex, politics, and science: Surveying the riskassessment battlefield.” Risk Analysis 19 (2) 1999
2. Flynn, J. Slovic, P. & Mertz, C.K. “The Nevada Initiative: A risk communication
fiasco.” Risk Analysis 13 (5) 1993. (Reprinted in Risk, Media, and Stigma,
Flynn, Slovic, Kunreuther, eds.)
3. Keller, C., Siegrist, M. and Gutscher, H. “The Role of the Affect and Availability
Heuristics in Risk Communication” Risk Analysis (2006) 26, 631-639.
Extra: KH, Problem 9-1
TA Session: Review Q. 1-3 of Boardman et al, Date and Time TBD
Week 11: Terrorism Risk
4/15/13
1. Kunreuther, H. and Heal, G. “Interdependent Security.” Journal of Risk and
Uncertainty 26 (2-3), p. 231-49.
2. Lakdawalla, D.N., Zanjani, G. “Insurance, Self-Protection, and the Economics of
Terrorism.” Journal of Public Economics 89 (9-10), 2005. p. 1891-1905.
3. Sunstein, C. “Terrorism and Probability Neglect.” Journal of Risk and
Uncertainty 26 (2-3), p. 121-36.
4. SKIM: Heal, G. and H. Kunreuther (2005). "IDS Models of Airline Security."
Journal of Conflict Resolution 49(2): 201-17.
Week 12: Project Presentation #3
4/22/13
Week 13: In-Class Final Exam
4/29/13
6