Benefit–Cost Analyses for Security Policies

Benefit–Cost Analyses for Security Policies

Does Increased Safety Have to Reduce Efficiency?

Edited by Carol Mansfield and V. K. Smith

Benefit–Cost Analyses for Security Policies describes how to undertake the evaluation of security policies within the framework of benefit–cost analysis and offers a unique contribution to analysis of homeland security regulations in the United States. The authors outline how established procedures for benefit–cost analysis must adapt to meet challenges posed by current security policy, through examining specific security related regulations. The logic of risk assessment, selection of a discount rate, valuation of travellers’ time when delayed due to screening, valuation of changes in risks of injury or death, and impacts of terrorist events on the economy as a whole are among the issues discussed. An outline of the research and policy evaluation steps needed to build robust benefit-cost methods to evaluate security related regulations in the future is presented in the book.

Chapter 6: A comparison of key benefit estimation issues for natural hazards and terrorism: ex ante/ex post valuation and endogenous risk

Scott Farrow

Subjects: economics and finance, methodology of economics, public sector economics, politics and public policy, terrorism and security

Extract

Many decision analytic tools can be used to inform public investments in terrorism response. Among them are multi-objective approaches, cost-effectiveness and benefit–cost analysis. At the core of all of them is the concept of someone’s preferences, whether citizen, terrorist or decision-maker, from which behavior and values are derived. This chapter focuses on usable similarities or contrasts in behavioral choices between natural hazard and terrorism settings. Although neither term is defined precisely here, events such as floods, fires, earthquakes, wind, drought, pests and epidemics may most often be considered natural hazards, while acts of violence for political purposes aimed typically against civilians is a common definition of terrorism. Terrorism has the element of human intention that many analysts believe distinguishes terrorism from natural hazards. Other acts of violence against civilians such as crimes may differ from terrorism in their purpose and attributes, but can be seen as related behaviors.

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