Calculation of an adjusted Disproportion Factor (DF^∗) which takes the societal acceptability of risks into account

Abstract

This paper develops an approach considering parameters related to the societal acceptance of industrial risks, to determine an adjusted Disproportion Factor (DF∗), whereby the pre-existing calculation model of the Disproportion Factor (DF) developed by Goose (2006) is used as the basis. Our approach will allow companies to have a much more realistic perception and coloured picture of decision-making, where societal acceptability is fully integrated into the calculation process. This way, the decision will not only be more accurate, but also be more defensible. After a literature review, 11 indicators were identified as relevant within the framework of prevention of disasters in companies. Factor analysis confirmed that the 11 indicators represent a societal acceptability of risks (SAR) concept. By using a scoring system we explain how an adjusted DF∗ can be determined. An illustrative example is also given to show how the model can actually be used. This study thus provides a scoring system that could be used by risk managers in order to include the societal acceptability of risks (SAR) into economic analyses of industrial risks.