On the economic value of safety

Abstract

In this article we discuss the hypothesis that safety and accident risk is in general not adequately incorporated into the economic planning and decision processes. Our starting point is a discussion of the business incentives for investing into safety. A simple economic model is used as a basis for the discussion. This model does not reflect all the factors being considered when making decisions affecting safety, but points at and reveals a way of thinking that strongly influence decision-makers. In particular, the official language used when decision-makers communicate about safety is not necessarily the same as the underlying driving forces, shown by the economic model. A key issue discussed in the article is the need for demonstrating that safety measures have a value in an economic sense. To what extent is it true that businesses would not invest in higher safety if such values cannot be demonstrated?