Cost-benefit analysis in fire safety engineering: State-of-the-art and reference methodology

Cost-effectiveness is a key consideration within fire safety engineering. Currently, different approaches are being applied in literature. These approaches differ in how cost-effectiveness is evaluated, which costs are considered, and how the preferred design solution is defined. Recognizing this issue, the Fire Protection Research Foundation enrolled an international team of researchers, supported by a broad stakeholder panel, to develop a reference methodology. In this paper, this reference methodology for cost-benefit analysis in fire safety engineering is presented following an extensive literature review. The methodology clarifies the minimum requirements for assessing cost-effectiveness, and highlights that only a present net value evaluation can be used to compare design alternatives. Commonly used cost-benefit ratios should only be used when deciding on the effectiveness of a single package of fire safety measures. An illustrative case study demonstrates the application of the methodology and shows how designs based on cost-benefit ratios can be sub-optimal when evaluating multiple possible fire safety measures.