Economic Performance of Residential Fire Sprinkler Systems

A benefit-cost analysis is performed to measure the expected present value net benefits (PVNB) resulting from the installation of a residential fire sprinkler system in a newly constructed, single-family house. The benefits and costs associated with installation and use of a fire sprinkler system are compared across three prototypical single-family house types: colonial, townhouse, and ranch. Each of the house types varies by design, size, and fire sprinkler affordability. Six fire sprinkler system designs are evaluated: a multipurpose network system, three stand-alone systems, and two stand-alone systems equipped with a backflow preventer. The sprinkler designs vary by installation cost (materials and labor cost) and required annual maintenance, but all were designed to meet the NFPA 13D standard. The estimated benefits of fire sprinklers include reductions in the following: the risk of civilian fatalities and injuries, homeowner insurance premiums, uninsured direct property losses, and uninsured indirect costs. Results show that residential sprinkler systems not requiring expensive annual upkeep or maintenance are economical. The expected PVNB in 2005 dollars is estimated as $2,967 for the colonial-style house, $3,099 for the townhouse, and $4,166 for the ranch-style house, given installation of the lowest life-cycle cost sprinkler system in each of the house types. A sensitivity analysis that measures the variability of the results to changes in the modeling assumptions confirms the robustness of the baseline analysis.