Keywords: expected lifetime utility, life quality index, LQI, risk acceptability, statistical life value, willingness to pay, risk assessment, risk management, technical facilities, hazards, failure rate, mortality reduction
Recent developments in risk acceptability for technical facilities
Recent developments in risk acceptance for technical facilities exposed to man-made and natural hazards are reviewed and discussed. Present value lifetime utilities involving the utility from consumption, discounting and survival probabilities by predictive cohort life tables are derived. Suitable parameters for the utility function are based on the so-called work-leisure optimisation principle. Intergenerationally acceptable, time-dependent discount rates are proposed. A risk acceptability criterion involving the increments in costs to reduce risks, the associated reductions in the failure rate and a constant defining of the societal value of a statistical life and the corresponding willingness-to-pay is given. These values are computed for a number of countries for two mortality reduction schemes. An example illustrates the results.