Failure Consequences and Valuations

This chapter examines methods for assessing and valuing the consequences of failures. It introduces analytical consequence modeling tools such as cause–consequence diagrams and functional models. Economic valuation principles are presented, including total economic value and distinctions among market and non-market impacts. The chapter addresses property damage, human life loss, injury, disability, and public health and ecological impacts. Valuation methods such as willingness-to-pay and human capital approaches are compared. Legal considerations including tort and professional liability are discussed, along with indirect losses and risk acceptability criteria such as ALARP. This chapter provides essential tools for translating technical failures into economic and societal metrics for decision-making.