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Benefits and Costs of Research: A Case Study of the Fire Safety Evaluation System.


pdf icon Benefits and Costs of Research: A Case Study of the Fire Safety Evaluation System. (4037 K)
Chapman, R. E.; Weber, S. F.

NISTIR 5863; 85 p. July 1996.

Available from:

National Technical Information Service
Order number: PB96-202288

Keywords:

benefit cost analysis; building economics; construction; economic analysis; fire safety; impact evaluation; life cycle costing; performance standards; research impacts; resource allocation

Abstract:

The National Institute of Standards and Technology (NIST) is improving its resource allocation process by doing "microstudies" of its research impacts on society. This report is one of a series of microstudies prepared by NIST's Building and Fire Research Laboratory (BFRL). This report focuses on a critical analysis of the economic impacts from past BFRL research efforts leading to the development and introduction of the performance-based Fire Safety Evaluation System (FSES) for health care facilities. The FSES was developed as an alternative to prescriptive compliance to the Life Safety Code for hospitals and nursing homes participating in the Medicare and Medicaid programs. This study of the FSES illustrates how to apply in practice a series of standardized methods to evaluate and compare the economic impacts of alternative research investments. The study is presented in sufficient detail to understand the basis for the economic impact analysis and to reproduce the results. It is an ex post study in that it is based on past research efforts. The results of this study demonstrate that the FSES has generated substantial cost savings to hospitals and nursing homes across the nation. The present value of savings nationwide attributable to the FSES is nearly $1 billion ($987 million in 1995 dollars). Furthermore, because of BFRL's timely involvement and leadership, the FSES was adopted into the Life Safety Code in 1981. The first fully-documented use of the FSES was in 1983. If BFRL had not participated in the development of the FSES, adoption into the Life Safety Code would likely have taken place in 1988. Consequently, potential cost savings accruing to hospitals and nursing homes over the period 1983 through 1989 would have been foregone. These cost savings are $564 million in 1995 dollars. These cost savings measure the value of BFRL's contribution for its research investment of approximately $4.5 million.