Investment decisions based on risk assessment

Reflecting on the safety of a certain situation can never be answered with a clear either - or. This question can only be answered by the evaluation of the occurrence probability of damage, because absolute safety does not exist. The answer to the question: what may safety cost? must therefore be based on the definition of risk as risk = damage times probability of occurrence. The answer must therefore be a costbenefit calculation, costs making risk reduction (= benefit) possible. The different evaluation of what the safety of a human life may cost is demonstrated by comparing investments in traffic safety and in protection from natural disasters. Comparing different cases shows that the levels of tolerated risks and investments in risk reduction differ enormously and makes a common framework highly necessary to be able to make decisions on investments and risk reduction on a rational basis. © 2012 Ernst & Sohn Verlag für Architektur und technische Wissenschaften GmbH & Co. KG, Berlin.