Alternatives to the Precommensuration of Costs, Benefits, Risks, and Timeby Yacov Y. Haimes, Univ of Virginia, United States,
Abstract: The thesis advanced in this paper is that benefit-cost analysis, the present-value-of-cost (and benefit) approach, and the expected value of damage as a measure of risk all share a faulty common denominator - the precommensuration of noncommensurable attributes into a single utility function. Alternative approaches are presented that can alleviate some of the harm resulting from current practices of precommensuration. The primary discussion focuses on a particular kind of precommensuration often encountered in the risk assessment process - the precommensuration of extreme events of low frequency and high damage with extreme events of high frequency and low damage. A brief summary is also given of the contributions made by the social and behavioral sciences to the understanding of the normative aspects of risk-its perception, valuation, and judgment.
Subject Headings: Risk management | Disasters | Benefit cost ratios | Social factors | Water resources | Geological faults
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