Benefit-Cost Analysis of Residential Fire Sprinkler Systems.
Benefit-Cost Analysis of Residential Fire Sprinkler
Systems.
(1616 K)
Butry, D. T.; Brown, M. H.; Fuller, S. K.
NISTIR 7451; 67 p. September 2007.
Sponsor:
U. S. Fire Administration, Emmitsburg, MD
Keywords:
sprinkler systems; residential buildings; building
fires; benefit cost analysis; economics; housing; costs;
installing; maintenance; NFIRS; fire statistics;
injuries; fire fatalities; sensitivity analysis; risk
reduction; sprinklers; equations; risks; death
Abstract:
This report documents a benefit-cost analysis performed
to measure the expected present value of net benefits
resulting from the installation of a multipurpose
network fire sprinkler system in a newly-constructed,
single-family house. The benefits and costs associated
with the installation and use of a fire sprinkler system
are compared across three prototypical single-family
housing types: colonial, townhouse, and ranch. The
installation costs differ by housing types, with the
colonial being the most expensive and the ranch the
least. The benefits experienced by residents of
single-family dwellings with sprinkler systems, as
measured in this report, include reductions in the
following: the risk of civilian fatalities and injuries,
homeowner insurance premiums, uninsured direct property
losses, and uninsured indirect costs. The primary costs
examined are for initial purchase and installation of
the sprinkler system. Maintenance and repair costs are
not examined because they are negligible. Results of the
benefit-cost analysis show that multipurpose network
sprinkler systems are economical. The expected present
value of net benefits (PVNB) in 2005 dollars is
estimated as $2919 for the colonial-style house, $3099
for the townhouse, and $4166 for the ranch-style house.
A sensitivity analysis is performed to measure the
variability of the results to changes in the modeling
assumptions. The sensitivity analysis confirms the
robustness of the baseline analysis. The PVNB range from
$704 to $4801 for the colonial-style house, from $884 to
$4981 for the townhouse, and from $1950 to $6048 for the
ranch-style house. Multipurpose network systems are the
lowest life-cycle cost systems because homeowners can
perform their own regular inspections and maintenance,
and thereby save on costs they would incur with other
systems. Given that they provide a similar level of
performance, in terms of fire-risk mitigation,
multipurpose network systems then achieve greater
cost-effectiveness over alternate systems. This
benefit-cost analysis is conducted for the United States
Fire Administration (USFA) by the Office of Applied
Economics (OAE) in the Building and Fire Research
Laboratory at the National Institute of Standards and
Technology. A benefit-cost model is designed and
estimated, expanding on the prior cost analysis
developed by OAE in NISTIR 7277, Economic Analysis of
Residential Fire Sprinkler Systems (Brown 2005). This
analysis provides a current estimation of
the cost-effectiveness of installing residential fire
sprinkler systems, updating a prior National Bureau of
Standards (NBS) study, A Benefit-Cost Model of
Residential Fire Sprinkler Systems (Ruegg and Fuller
1984).
Building and Fire Research Laboratory
National Institute of Standards and Technology
Gaithersburg, MD 20899