Risk-benefit analysis
Encyclopedia
Risk–benefit analysis is the comparison of the risk of a situation to its related benefits. Exposure to personal risk is recognized as a normal aspect of everyday life. We accept a certain level of risk in our lives as necessary to achieve certain benefits. In most of these risks we feel as though we have some sort of control over the situation. For example, driving an automobile is a risk most people take daily. "The controlling factor appears to be their perception of their individual ability to manage the risk-creating situation." Analyzing the risk of a situation is, however, very dependent on the individual doing the analysis. When individuals are exposed to involuntary risk, risk which they have no control, they make risk aversion their primary goal. Under these circumstances individuals require the probability of risk to be as much as one thousand times smaller than for the same situation under their perceived control.
Evaluations of future risk:
Real future risk as disclosed by the fully matured future circumstances when they develop.
Statistical risk, as determined by currently available data, as measured actuarially for insurance premiums.
Projected risk, as analytically based on system models structured from historical studies.
Perceived risk, as intuitively seen by individuals.
For research that involves more than minimal risk of harm to the subjects, the investigator must assure that the amount of benefit clearly outweighs the amount of risk. Only if there is favorable risk benefit ratio, a study may be considered ethical.
The Declaration of Helsinki
, adopted by the World Medical Association
, states that biomedical research
cannot be done legitimately unless the importance of the objective is in proportion to the risk to the subject. The Helsinki Declaration and the CONSORT Statement
stress a favorable risk benefit ratio.
Evaluations of future risk:
Real future risk as disclosed by the fully matured future circumstances when they develop.
Statistical risk, as determined by currently available data, as measured actuarially for insurance premiums.
Projected risk, as analytically based on system models structured from historical studies.
Perceived risk, as intuitively seen by individuals.
For research that involves more than minimal risk of harm to the subjects, the investigator must assure that the amount of benefit clearly outweighs the amount of risk. Only if there is favorable risk benefit ratio, a study may be considered ethical.
The Declaration of Helsinki
Declaration of Helsinki
The Declaration of Helsinki is a set of ethical principles regarding human experimentation developed for the medical community by the World Medical Association . It is widely regarded as the cornerstone document of human research ethics...
, adopted by the World Medical Association
World Medical Association
The World Medical Association is an international and independent confederation of free professional Medical Associations, therefore representing physicians worldwide...
, states that biomedical research
Biomedical research
Biomedical research , in general simply known as medical research, is the basic research, applied research, or translational research conducted to aid and support the body of knowledge in the field of medicine...
cannot be done legitimately unless the importance of the objective is in proportion to the risk to the subject. The Helsinki Declaration and the CONSORT Statement
Consolidated Standards of Reporting Trials
CONSORT encompasses various initiatives developed by the CONSORT Group to alleviate the problems arising from inadequate reporting of randomized controlled trials.-The CONSORT Statement:...
stress a favorable risk benefit ratio.
See also
- Benefit shortfallBenefit shortfallA benefit shortfall results from the actual benefits of a venture being lower than the projected, or estimated, benefits of that venture. If, for instance, a company is launching a new product or service and projected sales are 40 million dollars per year, whereas actual annual sales turn out to be...
- Cost–benefit analysis
- Odds algorithmOdds algorithmThe odds-algorithm is a mathematical method for computing optimalstrategies for a class of problems that belong to the domain of optimal stopping problems. Their solution follows from the odds-strategy, and the importance of the...
- Optimism biasOptimism biasOptimism bias is the demonstrated systematic tendency for people to be overly optimistic about the outcome of planned actions. This includes over-estimating the likelihood of positive events and under-estimating the likelihood of negative events. Along with the illusion of control and illusory...
- Reference class forecastingReference class forecastingReference class forecasting is the method of predicting the future, through looking at similar past situations and their outcomes.Reference class forcasting predicts the outcome of a planned action based on actual outcomes in a reference class of similar actions to that being forecast. The theories...