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 9: Valuing time for Department of Homeland Security projects and policies

Kenneth E. McConnell

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


United States federal regulatory requirements such as Executive Order 12866 lead federal agencies to perform benefit–cost analysis for large rulemaking and regulatory changes. Many of these costs and benefits come in the form of time saved. These are routinely treated in benefit–cost analysis by other departments such as the Department of Transportation. Given that the Department of Homeland Security would still be regarded as a relatively new regulatory agency, the effort to impose rational methods of resource allocation faces challenges in assessing benefits and costs not confronted elsewhere. Some of the services provided involve reductions in risks to human life and domestic threats to national security, which will take analysts into relatively new territory. Costs are often more mundane, such as minor reductions in the amount of time for various travel-related tasks. Given the serious nature of Homeland Security’s mandate, careful measurement of all costs and benefits is essential. The newness of the agency and the relatively high value of services provided present an opportunity for significant gains in resource allocation.

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