Due to the COVID-19 pandemic in 2020, the trade-off between economics and epidemic prevention (safety) has become painfully clear worldwide. This situation thus highlights the significance of balancing the economy with safety and health. Safety economics, considering the interdependencies between safety and micro-economics, is ideal for supporting this kind of decision-making. Although economic approaches such as cost-benefit analysis and cost-effectiveness analysis have been used in safety management, little attention has been paid to the fundamental issues and the primary methodologies in safety economics. Therefore, this paper presents a systematic study on safety economics to analyze the foundational issues and explore the possible approaches. Firstly, safety economics is defined as a transdisciplinary and interdisciplinary field of academic research focusing on the interdependencies and coevolution of micro-economies and safety. Then we explore the role of safety economics in safety management and production investment. Furthermore, to make decisions more profitable, economic approaches are summarized and analyzed for decision-making about prevention investments and/or safety strategies. Finally, we discuss some open issues in safety economics and possible pathways to improve this research field, such as security economics, risk perception, and multi-criteria analysis.
It has been witnessed in the COVID-19 pandemic that governments are often not able to minimize both deaths due to the coronavirus and economic loss (Anderson et al., 2020). Prevention measures such as quarantine, social distancing, and isolation have been demonstrated to effectively contain the extent of the epidemic although they are tough to follow and maintain by a majority of the population. In China, the effectiveness of implementing these measures has been undeniable. Nonetheless, the economic costs of the pandemic and its needed mitigation measures in China are also very high (keeping mortality as low as possible is the highest priority in China). China’s GDP decreased by 6.8% in the first quarter of 2020, compared with the same period last year (Wang and Yao, 2020). The COVID-19 pandemic thus highlights the role of economic factors on decisions regarding the prevention and mitigation of undesired events such as pandemics, accidents, and natural disasters.
Safety (safety-I) can be considered a condition related to the absence of accidents, losses, etc. (Leveson, 2004). Therefore, safety science aim to prevent or minimize the losses from accidents such as casualties, and damage to installations and the environment. Safety could also be understood as the antonym of risk, and “safe” can be considered a condition or situation characterized by an acceptable risk (Aven, 2014). Besides, Hollnagel (2014) defines safety (Safety-II) as the ability to succeed by performance variability and adaptation under expected and unexpected conditions. Safety I always focus on “why things go wrong” while Safety-II concerns more on “why things go right”. In that case, the purpose of safety science is to increase the probability of intended and acceptable outcomes as high as possible. Whether it is to avoid losses, reduce risks, or increase intended and acceptable outcomes, external (safety) methods and measures should be taken to obtain those objectives since safety does not naturally accompany human and production activities (Chen et al., 2021, Yang et al., 2018, Yang et al., 2020, Zeng et al., 2020, Zeng et al., 2021). For example, there are many risk reduction strategies in the chemical industry, including inherent safety, passive barriers, active barriers, emergency procedural barriers, safety culture, safety education, etc. (Khan and Amyotte, 2003, Reniers et al., 2011, Chen et al., 2020b). A set of methods, principles, and practices has been developed over the past century to identify and eliminate risks, avoid losses, and obtain acceptable outcomes.