IDEAS home Printed from https://ideas.repec.org/a/inm/ordeca/v3y2006i2p63-75.html
   My bibliography  Save this article

Should We Protect Commercial Airplanes Against Surface-to-Air Missile Attacks by Terrorists?

Author

Listed:
  • Detlof von Winterfeldt

    (Center for Risk and Economic Analysis of Terrorism Events (CREATE), University of Southern California, 3710 McClintock Avenue, RTH 310, Los Angeles, California 90089-2902)

  • Terrence M. O'Sullivan

    (Center for Risk and Economic Analysis of Terrorism Events (CREATE), University of Southern California, 3710 McClintock Avenue, RTH 310, Los Angeles, California 90089-2902)

Abstract

This paper describes a decision tree analysis to assess the cost-effectiveness of MANPADS (Man-Portable Air Defense Systems) countermeasures. These countermeasures are electronic devices that can be installed on commercial airplanes to detect and deflect surface-to-air missiles (SAMs) fired by terrorists. The model considers a terrorist attempt to shoot down a commercial airplane with a heat-seeking SAM, and it evaluates the decision to install countermeasures, taking into account alternative modes of attack, probabilities of success, and consequences to the economy. All model variables were fully parameterized, using reasonable ranges based on open-source literature. Not surprisingly, the probability of an attack, the consequences of an attack to the economy, and the cost of countermeasures are the most important parameters. Surprisingly, some of the hotly disputed parameters, such as the probability of an airplane surviving a successful hit or the probability of a false alarm, have very little impact on the results. The analysis suggests that MANPADS countermeasures installed on planes can be cost-effective if the probability of such an attack is large (greater than about 0.40 in ten years), the economic losses are large (greater than about $75 billion), and the countermeasures are relatively inexpensive (smaller than about $15 billion). An economic analysis conducted as part of this analysis showed that the economic impacts can be as large as $250 billion, thus making countermeasures a possibly cost-effective option. More research is needed to determine the real costs of MANPADS countermeasures and how terrorists may shift their tactics, once countermeasures are installed.

Suggested Citation

  • Detlof von Winterfeldt & Terrence M. O'Sullivan, 2006. "Should We Protect Commercial Airplanes Against Surface-to-Air Missile Attacks by Terrorists?," Decision Analysis, INFORMS, vol. 3(2), pages 63-75, June.
    • Handle: RePEc:inm:ordeca:v:3:y:2006:i:2:p:63-75
    DOI: 10.1287/deca.1060.0071
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/deca.1060.0071
    Download Restriction: no
    File URL: https://libkey.io/10.1287/deca.1060.0071?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cagliuso Sr. Nicholas V, 2005. "The Risks of Terrorism," Journal of Homeland Security and Emergency Management, De Gruyter, vol. 2(2), pages 1-7, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alessandro Vitale & Giuseppe Guido & Daniele Rogano, 2016. "A smartphone based DSS platform for assessing transit service attributes," Public Transport, Springer, vol. 8(2), pages 315-340, September.
    2. Erwann Michel‐Kerjan & Burkhard Pedell, 2006. "How Does the Corporate World Cope with Mega‐Terrorism? Puzzling Evidence from Terrorism Insurance Markets," Journal of Applied Corporate Finance, Morgan Stanley, vol. 18(4), pages 61-75, September.
    3. Howard C. Kunreuther & Erwann O. Michel-Kerjan, 2007. "Evaluating The Effectiveness of Terrorism Risk Financing Solutions," NBER Working Papers 13359, National Bureau of Economic Research, Inc.
    4. Robert W. Klein & Shaun Wang, 2009. "Catastrophe Risk Financing in the United States and the European Union: A Comparative Analysis of Alternative Regulatory Approaches," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(3), pages 607-637, September.
    5. Pankaj Pandey & Einar Snekkenes, 2016. "Using Financial Instruments to Transfer the Information Security Risks," Future Internet, MDPI, vol. 8(2), pages 1-62, May.
    6. Peter Gordon & James E. Moore & Ji Young Park & Harry W. Richardson, 2007. "The Economic Impacts of a Terrorist Attack on the U.S. Commercial Aviation System," Risk Analysis, John Wiley & Sons, vol. 27(3), pages 505-512, June.
    7. Peter D. Lunn & Cameron A. Belton & Ciarán Lavin & Féidhlim P. McGowan & Shane Timmons & Deirdre A. Robertson, 2020. "Using behavioral science to help fight the Coronavirus," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(1).
    8. Erwann Michel-Kerjan & Paul A. Raschky & Howard C. Kunreuther, 2009. "Corporate Demand for Insurance: An Empirical Analysis of the U.S. Market for Catastrophe and Non-Catastrophe Risks," Working Papers hal-00372420, HAL.
    9. repec:cup:judgdm:v:14:y:2019:i:3:p:280-287 is not listed on IDEAS
    10. repec:hal:journl:hal-00536925 is not listed on IDEAS
    11. Cárcamo, Jorge & von Cramon-Taubadel, Stephan, 2016. "Assessing small-scale raspberry producers’ risk and ambiguity preferences: evidence from field- experiment data in rural Chile," Department of Agricultural and Rural Development (DARE) Discussion Papers 260774, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
    12. Cárcamo, Jorge & Cramon-Taubadel, Stephan von, 2016. "Assessing small-scale raspberry producers' risk and ambiguity preferences: Evidence from field-experiment data in rural Chile," DARE Discussion Papers 1610, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    13. Elias, Wafa & Albert, Gila & Shiftan, Yoram, 2013. "Travel behavior in the face of surface transportation terror threats," Transport Policy, Elsevier, vol. 28(C), pages 114-122.
    14. Jerry R. Skees & Barry J. Barnett & Anne G. Murphy, 2008. "Creating insurance markets for natural disaster risk in lower income countries: the potential role for securitization," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 68(1), pages 151-167, May.
    15. Ryan J. B. Garcia & Detlof von Winterfeldt, 2016. "Defender–Attacker Decision Tree Analysis to Combat Terrorism," Risk Analysis, John Wiley & Sons, vol. 36(12), pages 2258-2271, December.
    16. Jeremy M. Wilson, 2017. "The future of brand protection: responding to the global risk," Journal of Brand Management, Palgrave Macmillan, vol. 24(3), pages 271-283, May.
    17. Henry H. Willis, 2007. "Guiding Resource Allocations Based on Terrorism Risk," Risk Analysis, John Wiley & Sons, vol. 27(3), pages 597-606, June.
    18. Trey Herr, 2021. "Cyber insurance and private governance: The enforcement power of markets," Regulation & Governance, John Wiley & Sons, vol. 15(1), pages 98-114, January.
    19. Franz Sinabell & Thomas Url, 2006. "Versicherungen als effizientes Mittel zur Risikotragung von Naturgefahren," WIFO Studies, WIFO, number 28181.
    20. Michel-Kerjan, Erwann & Raschky, Paul A., 2011. "The effects of government intervention on the market for corporate terrorism insurance," European Journal of Political Economy, Elsevier, vol. 27(S1), pages 122-132.
    21. Ralph L. Keeney & Detlof von Winterfeldt, 2011. "A Value Model for Evaluating Homeland Security Decisions," Risk Analysis, John Wiley & Sons, vol. 31(9), pages 1470-1487, September.
    22. Aglaia Petseti & Milton Nektarios, 2012. "Proposal for a National Earthquake Insurance Programme for Greece," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 37(2), pages 377-400, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ordeca:v:3:y:2006:i:2:p:63-75. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.