Cost-Benefit Analysis for Low-Probability, High-Impact Risks: Tutorials and Examples

L Talarico, Genserik Reniers, Nicola Paltrinieri

Research output: Chapter in Book/Conference proceedings/Edited volumeChapterScientificpeer-review


This chapter is intended to address cost-benefit analysis of safety investments aimed at controlling low-probability, high-impact accidents. Such events are characterized by high uncertainty owing to relative lack of data, and challenges may be encountered in the calculation of the related economic measures. For this reason, the notions of cost and benefit need to be broadened. A disproportion factor may be used as an adjustment in favor of safety when partial quantitative data about costs and benefits are available. When quantitative data are not available or qualitative measures associated with the safety investments are to be evaluated by decision-makers, cost-benefit analysis based on a multicriteria decision-making approach is suggested. Both the techniques are described by means of tutorials and specific examples of application.
Original languageEnglish
Title of host publicationDynamic Risk Analysis in the Chemical and Petroleum Industry
Subtitle of host publicationEvolution and Interaction with Parallel Disciplines in the Perspective of Industrial Application
PublisherButterworth Heinemann
ISBN (Print)978-0-12-803765-2
Publication statusPublished - 2016


  • Cost-benefit analysis
  • Disproportion factor
  • Multicriteria decision-making
  • Safety economics
  • Safety management


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