On the Integration of Equality Considerations into the Life Quality Index Concept for Managing Disaster Risk

Decisions about investments in public disaster risk mitigation projects are to be made in presence of many other investments a society could possibly perform. In order to derive a statement about the advantageousness of a particular disaster risk reduction initiative in comparison to other potential investments, the cost of the intervention has to be put in relation to the expected benefits that go in line with it. The question if the benefits outweigh the cost entails a transformation of the primary non monetary benefits due to disaster risk reduction into monetary units, where especially the valuation of reduced mortality risk can be conveniently assessed by applying the net benefit criterion derived from the life quality index (LQI). But as public risk reduction interventions usually involve a great variety of affected people, cost effectiveness is only one determinant in declaring a project as being socially beneficial. Only if the concept is widened to also account for the distributional consequences, i.e. the identification of winners and losers from the intervention, it can be guaranteed that a great number of individuals profit from the enhanced safety standards. This paper addresses this issue by extending the conventional net benefit criterion to also incorporating distributional effects in the decision process and demanding an equally distributed share of cost and benefits throughout society. Thus, in a welfare economic sense more comprehensive risk reduction acceptance criteria are derived.