A Note on the Concept of Risk Aversion in Safety Management

E. B. Abrahamsen, T Aven and M Sandøy

Journal of Risk and Reliability, 2006, vol. 220, issue 1, 69-71

Abstract: Many safety people use the term risk aversion as an argument for some specific decisions under uncertainty. The main purpose of this note is to draw attention to and discuss this practice. They are using the wrong term. Risk aversion is not reflecting what they would like to express. The main reason for investing in safety is not risk aversion, but the desire to protect some values in the face of uncertainties: the thinking is cautionary . Investment in safety is to reduce uncertainty and provide assurance if a hazardous situation should occur.

Keywords: risk aversion; safety management; decision making under uncertainty; cautionary principle (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:sae:risrel:v:220:y:2006:i:1:p:69-71

DOI: 10.1243/1748006XJRR16

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