United States
Environmental Protection Agency
Region III
Philadelphia, PA 19107
EPA903-F-94-001
February 1994 -
Region III
Technical Guidance Manual
Risk Assessment
                                   Use  of  Monte  Carlo   Simulation  in  Risk
                                   Assessments
                 EPA
                 Region III
                    EPA Contact: Dr. Roy L Smith


  Hazardous Waste Management Division
  Office of Superfund Programs
  February 1994
EPA's current risk assessment methods express health risks as single numerical values, or •single-point* estimates of
risk. This technique provides little information about uncertainty and variability surrounding the risk estimate. Recent
EPA guidance (EPA, 1992) recommends developing 'multiple descriptors' of risk to provide more complete information
to Agency decision-makers and the public. Monte Carlo simulation is a highly effective way to produce these multiple
risk descriptors. This document recommends guidelines under which Region III risk assessors may accept the optional
use of Monte Carlo simulation to develop multiple descriptors of risk. The Region will continue to require single-point
risk estimates, prepared under current national guidance, in conjunction with optional Monte Carlo simulations.
SINGLE  RISK  ESTIMATES  VS.   MULTIPLE
DESCRIPTORS

EPA designed  its human  health risk  assessment
guidance (e.g., EPA, 1991,1989 and 1988) to produce
protective, rather than best, estimates of risk. EPA is
aware  that true  risks  are  probably  less  than its
estimates, but has chosen a regulatory policy of giving
the  benefit  of  uncertainty  surrounding   the  risk
assessment to the exposed public.

These  protective  risk estimates  sometimes  create
difficulty for Agency decision-makers and the public.
Site-specific Regional risk assessments usually present
risk  as a single  number,  or single-point estimate,
accompanied by a qualitative discussion of uncertainty.
The public tends to focus on the single-point estimate
and  to overtook the uncertainty, which may  span
several orders of magnitude.  EPA risk managers,
though aware of the uncertainty, must still justify their
decisjon to either accept or reduce the single-point risk.
If the risk is close to the maximum acceptable level, it
is likely that different  assumptions  would  have
produced a different risk number, leading to a different
decision.  In  this way,  single-point risk assessment
methods place the risk  assessor  in an inappropriate
risk management role.
            Recent1 EPA guidance on risk characterization (EPA,
            1992)  discusses  this  problem   in  depth,  and
            recommends the use of multiple risk descriptors in
            addition  to  protective single-point  risk  estimates.
            Inclusion of these additional risk descriptors provides
            the public with more complete information on  the
            likelihood of various risk levels, and risk managers with
            multiple  risk-based  cleanup goals  from which  to
            choose.   This  guidance  mentions  Monte  Carlo
            simulation as  an effective  source of multiple  risk
            descriptors.

            MONTE CARLO SIMULATION
                                             [
                                                N
            Monte Carlo simulation is a statistical technique by
            which  a quantity  is calculated  repeatedly,  using
            randomly  selected   •what-if*  scenarios  for  each
            calculation. Though the simulation process is internally
            complex, commercial computer software performs the
            calculations as a single operation, presenting results in
            simple graphs  and tables. These results approximate
            the full range of possible outcomes, and the likelihood
            of each.  When Monte Carlo simulation is applied to
            risk  assessment,  risk  appears  as  a  frequency
            distribution graph similar to the familiar  bell-shaped
            curve,  which   non-statisticians  can   understand
            intuitively.

-------
 Monte Carlo simulation also has important limitations,
 which have restrained EPA from  accepting  it as a
 preferred risk assessment tool:

 1.  Available software cannot distinguish between
    variability and uncertainty.  Some factors, such as
    body weight and tap water ingestion,  show well-
    described differences among individuals.   These
    differences  are  called •variability*.  Other  factors,
    such as frequency and duration of trespassing, are
    simply unknown. This lack of knowledge is called
    •uncertainty*.  Current Monte Carlo software treats
    uncertainty  as  if it were  variability,  which  may
    produce misleading results.

 2.  Ignoring correlations among exposure variables
    can  bias Monte  Carlo calculations.   However,
    information  on  possible correlations  is  seldom
    available.

 3.  Exposure  factors  developed  from  short-term
    studies with large populations may  not accurately
    represent  long-term   conditions   in   small
    populations.

 4.  The tails of Monte Carlo risk distributions, which
    are  of  greatest  regulatory  interest,  are  very
    sensitive to the shape of the input distributions.

 Because of these  limitations,  Region III  does not
 recommend Monte  Carlo simulation as the sole, or
 even primary, risk assessment method.  Nevertheless,
 Monte Carlo simulation  is clearly  superior  to the
 qualitative  procedures  currently  used  to  analyze
 uncertainty  and   variability.    For  baseline  risk
 assessments at NPL sites, Region III recommends that
 uncertainty and variability surrounding single-point risk
 estimates rely on multiple  descriptors of risk (EPA,
 1992). Monte Carlo simulation will be an acceptable
 method for developing these multiple descriptors.

The following example (from Smith,  in press) illustrates
the advantages of  Monte  Carlo  simulation  in risk
 assessment:

 At  a  Superfund site in  Region III,  volatile  organic
 compounds migrated to residential wells.  The single-
 point  RME  estimate of lifetime cancer risk to exposed
 residents,  based  on  ingestion of  tap water  and
 inhalation while showering,  was 1.14e-3.

 Figure 1 shows the output of a PC-based Monte Carlo
 simulation  program for the risk assessment.  Each
 exposure parameter  was  entered  as a  frequency
 distribution (i.e., a  'bell-shaped* curve showing the
 range of possible values, and the  likelihood of each)
     0*
ExD*ct*d
• 2 8308gi*-4
Of. 114*.
AV«TBO»: 2
5Bth «i l«
90tn *ll«:
9Stn (I !•:
l| 99th HI !•
In, 	 •
h.
Illllllili, 	 	

3
9
1
5
a
i


te-4
8B»-4
97«-4
91*-4
69.- 3

               .5
                              1.5
                                             2.5
                  x 1»-3 * Uf«tin cancer Rim

  Fig 1. Probability distribution of upper bound lifetime cancer risk.
rather than as a single number. Carcinogenic potency
slopes were entered  as fixed  values rather than
frequency distributions, so the variability in risk was
due entirely to the exposure assumptions.

Risk was calculated 5000 times, with each calculation
based on a different randomly-selected  exposure
scenario.  The figure lists the RME, average, and four
percentiles  of  risk,  and shows  the  entire  risk
distribution.  The  RME risk estimate fell between the
95th and 99th percentiles in this example, appropriately
protective as intended.   This figure clearly provides
more  complete  risk information than  the
numerical RME  estimate.

GUIDELINES FOR USING MONTE CARLO SIMULATION

Region  III risk  assessors believe that Monte Carlo
simulation requires  more  development before it can
serve as  the primary risk assessment method,  for
reasons described above.  However, the technique has
clear  advantages over the qualitative analyses of
uncertainty and variability currently in use. Region III
will accept  Monte  Carlo simulations  submitted  as
uncertainty/variability  analyses in  risk  assessments,
under the following guidelines:

1.  Include  only  human  receptors.  This  guidance
    excludes environmental receptors.

2.  Submit a work plan for EPA review before doing
    the Monte Carlo simulation, to ensure the work will
    be acceptable  to EPA.  The workplan should
    describe the  software to  be used, the exposure
    routes  and  models,  and   input   probability
    distributions and their sources. EPA expects that
    peer-reviewed literature and site-specific data will
    be used whenever possible.  Use professi
    judgment only as a last resort, and only in the
    of triangular or uniform distributions. Describe how
    correlations among input variables will be handled.

-------
3.  Include only exposure variables in the Monte Carlo
    simulation.      Enter   reference   doses   and
    carcinogenic  slope  factors  as single  numbers,
    except for specific contaminants for which the EPA
    Office of Research and Development has already
    approved frequency  distributions.

4.  Include only significant exposure scenarios  and
    contaminants in the Monte Carlo simulation. First,
    calculate RME risks for all exposure routes under
    current guidance.   Select exposure  routes  for
    which RME risk exceeds either 1e-6 cancer risk or
    a non-carcinogenic hazard index of 1. Include only
    contaminants which contribute 1% or more of the
    total RME risk or hazard index.

5.  Use  Monte  Carlo   simulation  only to  analyze
    uncertainty and variability, as a 'multiple descriptor*
    of risk. Include standard RME risk estimates in all
    graphs and tables of Monte Carlo results. Generate
    deterministic  risks  using current EPA national
    guidance (EPA 1992, 1991, 19B9, and 1988).

6.  Include graphs and tables showing and describing
    each input distribution, distributions of risk for each
    exposure route,  and distributions  of  total  risk
    (summed across exposure  pathways  and  age
    groups, as appropriate under current guidance).

Region III will not accept Monte Carlo simulations which
are not approved beforehand, or do not adhere to
these guidelines.

SUMMARY

Region III will  accept Monte Carlo simulations  that
conform to the guidelines in this document, as part of
baseline  human  health  risk assessments.   The most
important guideline  is that all risk assessments must
include single-point RME risk estimates prepared under
current EPA national guidance. The Region will accept
Monte Carlo simulation only as an optional addition to,
not a substitute for, current risk assessment methods.

REFERENCES

EPA, 1992. Guidance on Risk Characterization for Risk
    Managers and Risk Assessors, (U.S. Environmental
    Protection  Agency,  Office of the Administrator,
    Washington,   DC, memorandum  from  F.  Henry
    Habicht on 26 February 1992).

EPA, 1991. Standard Default Exposure Factors, Risk
    Assessment  Guidance for Superfund,  Volume I:
    Human Health  Evaluation Manual Supplemental
    Guidance, (U.S. Environmental Protection Agency
   Office of Solid Waste and Emergency Response,
   Toxics  Integration  Branch,  Washington,  DC,
   OSWER Directive 9285:6-03).

EPA, 1989.  Risk Assessment Guidance for Superfund,
   Volume I: Human Health Evaluation Manual (Part A),
   (U.S. Environmental Protection Agency Office of
   Solid Waste  and Emergency Response, Toxics
   Integration Branch, Washington, DC, EPA/540/1-
   89/002).

EPA,  1988.   Exposure  Factors  Handbook,  (U.S.
   Environmental Protection Agency Office of Health
   and Environmental Assessment, Washington, DC,
   EPA/600/8-89/043).

Smith, R.L  In press.  Use of  Monte Carlo simulation
   for  human  exposure  at  a  Superfund  site.
   Submitted to Risk Analysis, May 1993.
For additional information, call (215) 597-6682.
Approved by:
              Thomas C. V<
              Hazardous Wi
Division

-------