Risk Management

Risk is a topic that has received wide attention in quantitative and qualitative literature. At its most basic level, Risk = Cost/Hazard × Probability of Occurrence. This equation states that the overall risk is equal to the cost or hazard associated with an event discounted by its probability of occurrence. Managing risk includes reducing the overall level of risk, either by reducing potential costs or by reducing probabilities of occurrence. Some scholars argue that all disasters are human-caused, because the events occur as a result of human decision-making. [Page 614]This entry will highlight some manners under which risk management occurs in the context of disasters.