The terms ‘safety’ and ‘risk’ are at the same time commonplace, evocative and somewhat obscure. As a result, it is hardly surprising that each of these terms has come to be used in a variety of subtly different ways, both in everyday language and in more technical discussion. It would therefore seem appropriate to begin by explaining precisely what is to be meant by ‘safety’ and ‘physical risk’ in the present context. It is also important to be clear from the outset about the sense in which the argument that follows will attempt to provide an ‘economic’ analysis of these phenomena.

In this chapter ‘safety’ refers exclusively to the safety of human life and constitutes the degree of protection from – or more accurately, attenuation of – physical risk. The latter is, in turn, the extent of an individual's exposure to the possibility or chance of death or injury during a specified period of time. In much of what follows, physical risk will be described in terms of one or another kind of probability, in which case safety and physical risk become straightforward obverses of one another in that the former denotes the probability of surviving a forthcoming period (or avoiding a particular kind of injury during it) white the latter is the probability of dying during the period (or incurring the injury).