Quantitative risk analysis criteria

In a simple sensitivity analysis, each parameter is varied individually, and the output is a qualitative understanding of which parameters have the most impact on project viability. In a more formal risk analysis, statistical methods are used to examine the effect of variation in all of the parameters simultaneously and hence quantitatively determine the range of variability in the economic criteria. This allows the design engineer to estimate the degree of confidence with which the chosen economic criterion can be said to exceed a given threshold. 

Three criteria were developed to define acceptable risk the personal acceptance of risks, the social acceptance, and the economic criterion. Maximum allowable probabilities of exceedance for all possible consequences and all risk categories are given in the literature. Three commonly used quantitative methods to define acceptable flooding probabilities on the level of the protected area are cost-benefit analysis, utility analysis, and life quality analysis. 

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