Risk Analysis in Engineering and Economics: 2nd Edition (Hardback) book cover

Risk Analysis in Engineering and Economics

2nd Edition

By Bilal M. Ayyub

Chapman and Hall/CRC

640 pages | 200 B/W Illus.

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Hardback: 9781466518254
pub: 2014-03-18
eBook (VitalSource) : 9780429098475
pub: 2014-03-18
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Risk Analysis in Engineering and Economics is required reading for decision making under conditions of uncertainty. The authordescribes the fundamental concepts, techniques, and applications of the subject in a style tailored to meet the needs of students and practitioners of engineering, science, economics, and finance. Drawing on his extensive experience in uncertainty and risk modeling and analysis, the author covers everything from basic theory and key computational algorithms to data needs, sources, and collection. He emphasizes practical use of the methods presented and carefully examines the limitations, advantages, and disadvantages of each to help readers translate the discussed techniques into real-world solutions.

This Second Edition:

  • Introduces the topic of risk finance
  • Incorporates homeland security applications throughout
  • Offers additional material on predictive risk management
  • Includes a wealth of new and updated end-of-chapter problems
  • Delivers a complementary mix of theoretical background and risk methods
  • Brings together engineering and economics on balanced terms to enable appropriate decision making
  • Presents performance segregation and aggregation within a risk framework
  • Contains contemporary case studies, such as protecting hurricane-prone regions and critical infrastructure
  • Provides 320+ tables and figures, over 110 diverse examples, numerous end-of-book references, and a bibliography

Unlike the classical books on reliability and risk management, Risk Analysis in Engineering and Economics, Second Edition relates underlying concepts to everyday applications, ensuring solid understanding and use of the methods of risk analysis.


Praise for the First Edition

"This book ambitiously tackles risk analysis from the ground up. … an excellent reference for individuals studying in a variety of risk-related disciplines. … enlightening [examples]…attractive to students approaching risk studies from a variety of substantive backgrounds. … Advanced students are likely to find Ayyub's treatments…exceedingly valuable."

Journal of the American Statistical Association, June 2004, Vol. 99, No. 466

"… a good textbook and reference. The mix of engineering and economics is well balanced. … Valuable for students after college and useful for professional engineers."

Technometrics, August 2004, Vol. 46, No. 3

Praise for the Second Edition

"… one of a kind in the market. … I am not aware of books that cover the subject in as comprehensive a manner."

—Professor Nii O. Attoh-Okine, University of Delaware, Newark, USA

Table of Contents


Societal Needs

Risk Analysis

System Framework

Knowledge and Ignorance

Exercise Problems

Risk Analysis Methods


Risk Terminology

Risk Assessment

Risk Management and Control

Risk Communication

Exercise Problems

System Definition and Structure


System Definition Models

Hierarchical Definitions of Systems

System Complexity

Exercise Problems

Reliability Assessment


Analytical Performance-Based Reliability Assessment

Empirical Reliability Analysis Using Life Data

Bayesian Methods

Reliability Analysis of Systems

Exercise Problems

Failure Consequences and Severity


Analytical Consequence and Severity Assessment

Real Property Damage

Loss of Human Life


Indirect Losses

Public Health and Ecological Damages

Exercise Problems

Engineering Economics and Finance


Fundamental Economic Concepts

Cash-Flow Diagrams

Interest Formulae

Economic Equivalence Involving Interest

Economic Equivalence and Inflation

Economic Analysis of Alternatives

Exercise Problems

Risk Control Methods


Philosophies of Risk Control

Risk Aversion in Investment Decisions

Risk Homeostasis

Insurance for Loss Control and Risk Transfer

Benefit-Cost Analysis

Risk-Based Maintenance Management

Exercise Problems

Data for Risk Studies


Data Sources


Expert-Opinion Elicitation

Model Modification Based on Available Data

Failure Data Sources

Exercise Problems

Fundamentals of Probability and Statistics

Sample Spaces, Sets, and Events

Mathematics of Probability

Random Variables and Their Probability Distributions

Failure Data

References and Bibliography


About the Author

Bilal M. Ayyub is professor of civil and environmental engineering at University of Maryland, College Park and director of the Center for Technology and Systems Management at A. James Clark School of Engineering. Highly decorated and widely published, he holds degrees from Kuwait University and the Georgia Institute of Technology. A fellow of ASCE, ASME, SRA, and SNAME, as well as a senior member of IEEE, he has completed research and development projects for entities including the National Science Foundation, U.S. Air Force, U.S. Coast Guard, Army Corps of Engineers, Navy, Department of Homeland Security, and private insurance and engineering firms.

Subject Categories

BISAC Subject Codes/Headings:
MATHEMATICS / Probability & Statistics / General