Cost-benefit analysis of residential sprinklers – Application of a judgement value method

It is common for agencies around the world to conduct some form of cost-benefit analysis (CBA) when proposing an investment in a safety measure. Since resources are limited, expenditure on one particular safety measure reduces the availability of those resources for other measures. Due to finite financial resources, an investment in a safety scheme thus requires a trade-off. As such, the objective of a CBA is to assess whether the proposed measure provides a net-benefit to society or whether resources would be better directed elsewhere. Fire safety measures, such as sprinkler systems, are one means to reduce the risk posed by fire in buildings. Sprinkler systems have a long record of property and life protection but there is a cost associated with their installation and ongoing maintenance. For many years various agencies have examined whether sprinkler systems should be mandated in some or all buildings within their jurisdiction, and as a result have conducted different forms of CBA. However, there are a number of challenges when carrying out such assessments particularly when it comes to placing a value on a preventable fatality. This paper revisits previous CBA studies available in the literature for the installation of residential (domestic) sprinkler systems in single family dwellings. This paper applies recent work to extend the J-value methodology which employs the life quality index (LQI) concept as a means of valuing the benefit of increasing life expectancy through the mitigation of consequences, or reduction in the occurrence rate of a hazard. Similar to the earlier work, the paper finds that the unilateral installation of sprinkler systems in single family homes mostly results in a net-disbenefit to society (depending upon jurisdiction). Widespread adoption of sprinklers is generally only found to be cost-beneficial where the installation and maintenance costs can be split across a number of properties per installation, e.g. apartment buildings. This conclusion is reached through the adoption of a novel and objective judgement scalar that is easy to implement and interpret. Fire safety measures, such as sprinkler systems, are one means to reduce the risk posed by fire in buildings. Sprinkler systems have a long record of property and life protection but there is a cost associated with their installation and ongoing maintenance. For many years various agencies have examined whether sprinkler systems should be mandated in some or all buildings within their jurisdiction, and as a result have conducted different forms of CBA. However, there are a number of challenges when carrying out such assessments particularly when it comes to placing a value on a preventable fatality. This paper revisits previous CBA studies available in the literature for the installation of residential (domestic) sprinkler systems in single family dwellings. This paper applies recent work to extend the J-value methodology which employs the life quality index (LQI) concept as a means of valuing the benefit of increasing life expectancy through the mitigation of consequences, or reduction in the occurrence rate of a hazard. Similar to the earlier work, the paper finds that the unilateral installation of sprinkler systems in single family homes mostly results in a net-disbenefit to society (depending upon jurisdiction). Widespread adoption of sprinklers is generally only found to be cost-beneficial where the installation and maintenance costs can be split across a number of properties per installation, e.g. apartment buildings. This conclusion is reached through the adoption of a novel and objective judgement scalar that is easy to implement and interpret