The Role of Society in Engineering Risk Analysis: A Capabilities‐Based Approach

This article proposes a new conceptual framework in engineering risk analysis to account for the net impact of hazards on individuals in a society. It analyzes four limitations of prevailing approaches to risk analysis and suggests a way to overcome them. These limitations are a result of how societal impacts are characteristically accounted for and valued. Prevailing approaches typically focus too narrowly on the consequences of natural or man‐made hazards, not accounting for the broader societal impacts of such hazards. Such approaches lack a uniform and consistent metric for accounting for the impact of the nonquantifiable consequences (like psychological trauma or societal impacts) and rely upon implicit and potentially inaccurate value judgments when evaluating risks. To overcome these limitations, we propose an alternative, Capabilities‐Based Approach to the treatment of society in risk analysis. A similar approach is currently used by the United Nations to quantitatively measure the degree of development in countries around the world. In a Capabilities‐Based Approach, the potential benefits and losses due to a hazard are measured and compared in a uniform way by using individual capabilities (functionings individuals are able, still able, or unable to achieve) as a metric. This Capabilities‐Based Approach provides a foundation for identifying and quantifying the broader, complex societal consequences of hazards and is based on explicit, value judgments. The Capabilities‐Based Approach can accommodate different methods or techniques for risk determination and for risk evaluation and can be used in assessing risk in diverse types of hazards (natural or man‐made) and different magnitudes that range from minor to catastrophic. In addition, implementing a Capabilities‐Based Approach contributes to the development of a single standard for public policy decision making, since a Capabilities‐Based Approach is already in use in development economics and policy.