Pen lying on paper with mathematical equations printed on the paper.

Determining Risk

In the National Risk Index, risk is defined as the potential for negative impacts as a result of a natural hazard.

The risk equation behind the Risk Index includes three components: a natural hazards component (Expected Annual Loss), a consequence enhancing component (Social Vulnerability), and a consequence reduction component (Community Resilience). The datasets supporting the natural hazards and consequence reduction components have been standardized using a min-max normalization approach. The dataset supporting the consequence enhancing component was acquired in a normalized format, allowing for easy incorporation into the National Risk Index risk calculation. Using these three components, a composite Risk Index score and hazard type Risk Index scores are calculated for each community (county and Census tract) included in the Index.

A graphic depicting the four components of the National Risk Index equation. The equation is Expected Annual Loss times Social Vulnerability divided by Community Resilience equals the Risk Index. Expected Annual Loss is the natural hazards component that represents the average economic loss in dollars resulting from natural hazards each year. Social Vulnerability is a consequence enhancing risk component that represents the susceptibility of social groups to the adverse impacts of natural hazards, including disproportionate death, injury, loss, or disruption of livelihood. Community Resilience is a consequence reduction risk component that represents the ability of a community to prepare for anticipated natural hazards, adapt to changing conditions, and withstand and recover rapidly from disruptions. The Risk Index represents the potential for negative impacts resulting from natural hazards.

Each community has a composite Risk Index score and up to 18 hazard type Risk Index scores (e.g., Tornado Risk Index score). A composite Risk Index score measures the relative risk of a community based on all 18 natural hazards included in the Index, while a hazard type Risk Index score measures the relative risk of a community for a specific hazard type.

For comprehensive details about how risk is calculated for the Risk Index, see the National Risk Index Technical Documentation.