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Valuing the Risk of Death from Terrorist Attacks

Author

Listed:
  • Robinson Lisa A

    (Independent Consultant)

  • Hammitt James K.

    (Harvard University)

  • Aldy Joseph E.

    (Harvard Kennedy School)

  • Krupnick Alan

    (Resources for the Future)

  • Baxter Jennifer

    (Industrial Economics, Incorporated)

Abstract

Regulations designed to increase homeland security often require balancing large costs against highly uncertain benefits. An important component of these benefits is the reduced risk of fatalities from terrorist attacks. While the risk to an individual appears small, the benefits may be large when aggregated over the population. U.S. regulatory agencies have well-established approaches for valuing mortality risks, but address risks that differ in significant respects from those associated with terrorism. The best available estimates of the value of small risk reductions, expressed as the value per statistical life (VSL), average about $6.5 million. However, terrorism-related risks may be perceived as more dreaded and ambiguous, and less controllable and voluntary, than the workplace risks underlying many VSL estimates. These factors may increase the VSL appropriate for terrorism risks, possibly doubling the value.

Suggested Citation

  • Robinson Lisa A & Hammitt James K. & Aldy Joseph E. & Krupnick Alan & Baxter Jennifer, 2010. "Valuing the Risk of Death from Terrorist Attacks," Journal of Homeland Security and Emergency Management, De Gruyter, vol. 7(1), pages 1-27, February.
    • Handle: RePEc:bpj:johsem:v:7:y:2010:i:1:p:27:n:6
    DOI: 10.2202/1547-7355.1626
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    Citations

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    Cited by:

    1. Lisa A. Robinson & James K. Hammitt, 2011. "Behavioral Economics and Regulatory Analysis," Risk Analysis, John Wiley & Sons, vol. 31(9), pages 1408-1422, September.
    2. Patrick Carlin & Brian E. Dixon & Kosali I. Simon & Ryan Sullivan & Coady Wing, 2022. "How Undervalued is the Covid-19 Vaccine? Evidence from Discrete Choice Experiments and VSL Benchmarks," NBER Working Papers 30118, National Bureau of Economic Research, Inc.
    3. Lisa A. Robinson & James K. Hammitt, 2013. "Behavioral economics and the conduct of benefit–cost analysis: towards principles and standards," Chapters, in: Scott O. Farrow & Richard Zerbe, Jr. (ed.), Principles and Standards for Benefit–Cost Analysis, chapter 10, pages 317-363, Edward Elgar Publishing.
    4. Stef Janssen & Alexei Sharpanskykh & Richard Curran, 2019. "AbSRiM: An Agent‐Based Security Risk Management Approach for Airport Operations," Risk Analysis, John Wiley & Sons, vol. 39(7), pages 1582-1596, July.
    5. Thöns, Sebastian & Stewart, Mark G., 2019. "On decision optimality of terrorism risk mitigation measures for iconic bridges," Reliability Engineering and System Safety, Elsevier, vol. 188(C), pages 574-583.
    6. Robin L. Dillon & William J. Burns & Richard S. John, 2018. "Insights for Critical Alarm-Based Warning Systems from a Risk Analysis of Commercial Aviation Passenger Screening," Decision Analysis, INFORMS, vol. 15(3), pages 154-173, September.
    7. Anthony M. Barrett, 2010. "Cost Effectiveness of On-Site Chlorine Generation for Chlorine Truck Attack Prevention," Decision Analysis, INFORMS, vol. 7(4), pages 366-377, December.
    8. Kochi, Ikuho & Taylor, Laura O., 2011. "Risk Heterogeneity and the Value of Reducing Fatal Risks: Further Market-Based Evidence," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 2(3), pages 1-28, August.
    9. Mark G. Stewart & John Mueller, 2013. "Terrorism Risks and Cost‐Benefit Analysis of Aviation Security," Risk Analysis, John Wiley & Sons, vol. 33(5), pages 893-908, May.
    10. Lisa A. Robinson & James K. Hammitt, 2015. "Research Synthesis and the Value per Statistical Life," Risk Analysis, John Wiley & Sons, vol. 35(6), pages 1086-1100, June.
    11. Scotton Carol R., 2013. "New risk rates, inter-industry differentials and the magnitude of VSL estimates," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 39-80, March.
    12. Stewart, Mark G. & Mueller, John, 2014. "Cost-benefit analysis of airport security: Are airports too safe?," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 19-28.

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