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 7: Urban adaptation to low-probability shocks: contrasting terrorism and natural disaster risk

Matthew E. Kahn

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


All United States metropolitan households and firms face trade-offs in choosing whether to locate in the city center or the suburbs. More and more of these decision-makers are choosing to suburbanize. Suburban locations offer cheaper land prices and a newer, more efficient building stock. Although in the past transportation costs to access the productive city center posed a significant cost of suburbanization, improvements in transportation such as highways and information technology diffusion have dramatically reduced this cost (Baum-Snow, 2007). Starting in the 1960s through the early 1990s, city center quality of life decline introduced a new ‘push factor’ encouraging suburbanization. Major cities suffered from high taxes per dollar of government services, poor inner city public schools, pollution, urban poverty, racial discord and crime (Mieskowski and Mills, 1993).

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