Ergonomics Economics: Prevention is a Good Investment

A post from Ergonomics Economics sound eerily similar to the climate change debate to me.  Basically, industry tries to save money by ignoring problems until they reach crisis state.  Whether it is the atmosphere or the human body, the same rules apply. It makes more financial sense to invest in prevention rather than waiting until crises arise and then paying for the damages.

I believe there is a substantial difference in the standards of proof in finance and science, and this is responsible for a significant misallocation of resources in industry today.  It is part of the story of why ergonomics is not utilized to maximize shareholder value.

Much of the argument over general duty citations and the ergonomics standard have revolved around whether there is a scientific basis for injuries being caused by biomechanical factors.

Opponents of ergonomics have focused on weaknesses of study designs and held research reports to the standards found in the medical science literature.

The standard of certainty in finance is less than it is in science, so profit-maximizing decision makers should not rely on policy-science discussions or analyses to inform them about whether to adopt ergonomics as an injury prevention strategy.

Decision theory says the expected value of choosing to purchase one share of this stock is

EV=0.9*P – 0.1*P=0.8P   (90% certainty)

Scientific uncertainty must have a P-value being less than 0.05 (i.e. greater than 95% certainty

While I strongly believe that there is a scientific basis for biomechanics as a risk factor for musculoskeletal injuries, an ergonomics skeptic does not need to believe in ergonomics with a level of scientific certainty to use ergonomics to make rational decisions to allocate capital to maximize profit.

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