Operational Safety Economics

Chapter 9General Conclusions

In this book, theories, models, approaches, and examples within the field of operational safety economics are provided, taking the organizational viewpoint. An overview of useful microeconomic concepts and their relationship with operational safety, are given. Despite the importance that organizations attach to economics, on the one hand, and operational safety, on the other, the combination of both, translated into “operational safety economics,” or simply “safety economics,” is often disregarded or misunderstood by company management.

In today's organizations, hazards are identified, risks are determined, calculated, and prioritized, and risk management actions are defined and monitored. However, these safety actions and the accompanying investments are often not well understood by company management from a financial and economic perspective. The investments are often based on relatively simple risk assessment methods and they are pursued with some kind of “gut feeling,” but without thorough economic assessments and going into depth with regard to the economic aspects of the different types of risk, thereby looking at opportunity costs, expected hypothetical benefits, company management utilities, and so on.

Indeed, a lot has been said and written about economics and economic viewpoints in relation to safety, especially on a macroeconomic level, but to the best of the author's knowledge there has never been published before a comprehensive overview ...