Design Tradeoffs: The Social Costs of Vehicle Fire Protection 2012-01-0985

Rational design for fire safety necessarily includes consideration of risk tradeoffs that tend to reduce one risk but may increase another. Traditional engineering design criteria can be supplemented with important factors that rely on expertise from other disciplines. Engineering analysis may be able to address reduction in fire risk due to the introduction of new technology, but may not address the social costs associated with this new technology. For example, the resultant increase in vehicle cost may prevent some people from purchasing a vehicle (impacting individuals' lives), may reduce the number of vehicles sold (impacting manufacturers), and may reduce taxes collected (impacting the government). This must be weighed against decreased risk of property damage, injury, and fatality due to fire. In this paper, the methods of benefit-cost analysis from economics were applied to make this evaluation. Benefit-cost analysis facilitates the decision-making process by providing measures in monetary terms of the important costs (including social costs) and benefits as a common metric for comparing the options. Its use here is intended to demonstrate a means of encompassing all factors of importance to the design process. Because the use of monetary terms is rejected by some when associated with issues of vehicle safety, the appropriateness of the application of benefit-cost analysis is discussed along with methods of presenting results to address these concerns.