Risk Exposure and Risk Attitude of Homeowners in Fire Protection Investment Decisions.
Risk Exposure and Risk Attitude of Homeowners in Fire
Protection Investment Decisions.
Fuller, S. K.
NISTIR 89-4212; 82 p. December 1989.
Order number: PB90-141383
fire protection; risk analysis; sprinkler systems;
decision making; risks
The report demonstrates that the Analytic Hierarchy
Process (AHP) is a promising decision tool for
evaluating fire protection systems for homeowners. It
lays the ground for development of specialized computer
software for applying the AHP to decisions of individual
homeowners. Unlike conventional methods of economic
analysis, the AHP integrates quantifiable and
qualitative variables. The study explores how to
include in the decision-making process information on an
individual's risk exposure and risk attitude,
information which is generally difficult or impossible
to quantify. By differentiating between risk exposure
and risk attitude, this application goes beyond the
AHP's conventional treatment of risk. The AHP is
applied to the choice of purchasing smoke detectors, a
sprinkler system, or a combination of the two.