Cost Benefit Analysis (CBA) is a standard tool for comparing different decisions and identifying the right level of expenditure. However, its application to risk prevention raises a number of ethical and practical issues. To name just one: putting a value on human life is still a strongly-criticized, taboo subject.
All the same, could CBA's transparency and efficient analysis of decision-making factors help us to improve our current prevention and safety systems?
This Cahier de la sécurité industrielle addresses a complex subject via 10 simple questions, answered by economist Nicolas Treich, including:
- Is CBA compatible with a civic-minded approach to risk management?
- How do you actually evaluate costs and benefits in a CBA?
- What is the feedback on CBA from other countries?
- …
Objectives
To provide a simple overview of the complex concept of Cost Benefit Analysis and its place among other risk management techniques.
About the author
Nicolas Treich is a researcher in Economics at the Department of Environmental, Natural Resource, and Agricultural Economics (LERNA (Laboratoire d’Economie de l’environnement, des Ressources Naturelles et de l’Agriculture) in Toulouse. His research deals with the application of micro-economic theory to issues on the frontiers of risk, public policy, and environmental issues. He has published in numerous reviews and journals.