The importance of traffic safety has prompted considerable research on predicting driver risk and evaluating the impact of risk factors. Driver risk modeling is challenging due to the rarity of motor vehicle crashes and heterogeneity in individual driver risk. Statistical modeling and analysis of such driver data are often associated with Big Data, considerable noise, and lacking informative predictors. This dissertation aims to develop several systematic techniques for traffic safety modeling, including finite sample bias correction, decision-adjusted modeling, and effective risk factor construction. Poisson and negative binomial regression models are primary statistical analysis tools for traffic safety evaluation. The regression parameter estimation could suffer from the finite sample bias when the event frequency (e.g., the total number of crashes) is low, which is commonly observed in safety research. Through comprehensive simulation and two case studies, it is found that bias adjustment can provide more accurate estimation when evaluating the impacts of crash risk factors. I also propose a decision-adjusted approach to construct an optimal kinematic-based driver risk prediction model. Decision-adjusted modeling fills the gap between conventional modeling methods and the decision-making perspective, i.e., on how the estimated model will be used. The key of the proposed method is to enable a decision-oriented objective function to properly adjust model estimation by selecting the optimal threshold for kinematic signatures and other model parameters. The decision-adjusted driver-risk prediction framework can outperform a general model selection rule such as the area under the curve (AUC), especially when predicting a small percentage of high-risk drivers. For the third part, I develop a Multi-stratum Iterative Central Composite Design (miCCD) approach to effectively search for the optimal solution of any "black box" function in high dimensional space. Here the "black box" means that the specific formulation of the objective function is unknown or is complicated. The miCCD approach has two major parts: a multi-start scheme and local optimization. The multi-start scheme finds multiple adequate points to start with using space-filling designs (e.g. Latin hypercube sampling). For each adequate starting point, iterative CCD converges to the local optimum. The miCCD is able to determine the optimal threshold of the kinematic signature as a function of the driving speed. / Doctor of Philosophy / When riding in a vehicle, it is common to have personal judgement about whether the driver is safe or risky. The drivers’ behavior may affect your opinion, for example, you may think a driver who frequently hard brakes during one trip is a risky driver, or perhaps a driver who almost took a turn too tightly may be deemed unsafe, but you do not know how much riskier these drivers are compared to an experienced driver. The goal of this dissertation is to show that it is possible to quantify driver risk using data and statistical methods. Risk quantification is not an easy task as crashes are rare and random events. The wildest driver may have no crashes involved in his/her driving history. The rareness and randomness of crash occurrence pose great challenges for driver risk modeling. The second chapter of this dissertation deals with the rare-event issue and provides more accurate estimation. Hard braking, rapid starts, and sharp turns are signs of risky driving behavior. How often these signals occur in a driver’s day-to-day driving reflects their driving habits, which is helpful in modeling driver risk. What magnitude of deceleration would be counted as a hard brake? How hard of a corner would be useful in predicting high-risk drivers? The third and fourth chapter of this dissertation attempt to find the optimal threshold and quantify how much these signals contribute to the assessment of the driver risk. In Chapter 3, I propose to choose the threshold based on the specific application scenario. In Chapter 4, I consider the threshold under different speed limit conditions. The modeling and results of this dissertation will be beneficial for driver fleet safety management, insurance services, and driver education programs.