Thoughts on the Establishment of Standards

Keeney, R.L. (1974). Thoughts on the Establishment of Standards. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-74-072

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Abstract

The role of standards as I see it is to promote decision making that is in the interest of the public. For instance, air pollution standards might limit the sulfur content of fuels burned within a city or country. Without these standards, some individuals may burn cheaper higher sulfur fuels using the reasoning that "the little bit of sulfur dioxide contributed by me can't hurt that much". However, if everyone uses the high sulfur fuels, the general health of the public may deteriorate. Hence, standards are enacted to prohibit this situation from occurring.

Usually standards specify maximum or minimum limits in terms of either absolute amounts or flowrates. Examples of the former are limitations on heights of buildings and ability to withstand an earthquake of specified magnitude. Under the latter are the air pollution standards of "parts per million" and radiation dosages due to nuclear facilities.

This short note attempts to support the contention that standards should be specified in light of (1) the public preferences and, (2) the alternatives available. The implications of any alternative must always have some degree of uncertainty, so in this sense, my contention is that standards should depend on preferences for and probabilities of the consequences of the available alternatives. This particular viewpoint will be explained in terms of a simple abstract example. The thoughts contained here are meant to illustrate some of the considerations and relationships that I feel are important in establishing standards. They are not meant as complete procedures for the process of setting standards.

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