ABSTRACT
The process of risk assessment and management is generally based on three sets of sequenced and inter-related activities, namely: assessment of risk in terms of what can go wrong, the probability of it going wrong and the possible consequences, management of risk in terms of what can be done. Event Tree Analysis (ETA) is a logical process that works the opposite way of Fault Tree Analysis (FTA) by focusing on events that could occur after a critical incident. There are two major empirical approaches to estimating willingness to pay (WTP) values for risk reductions, namely the revealed preference method (RPM) and the stated preference method (SPM). RPM involves identifying situations where people actually trade off money against risk. SPM on the other hand involves asking people more or less directly about their hypothetical willingness to pay for safety/security measures that give them specified reductions in risk in specified contexts.
