Valuing a homeland security policy: Countermeasures for the threats from shoulder mounted missiles

V. Kerry Smith, Carol Mansfield and Laurel Clayton

Chapter 20 in The Economics of Environmental Risk, 2022, pp 268-296 from Edward Elgar Publishing

Abstract: This paper reports estimates for the ex-ante tradeoffs for three specific homeland security policies that all address a terrorist attack on commercial aircraft with shoulder mounted missiles. Our analysis focuses on the willingness to pay for anti-missile laser jamming countermeasures mounted on commercial aircraft compared with two other policies as well as the prospect of remaining with the status quo. Our findings are based a stated preference conjoint survey conducted in 2006 and administered to a sample from Knowledge Networks' national internet panel. The estimates range from $100 to $220 annually per household. Von Winterfeldt and O'Sullivan's (2006) analysis of the same laser jamming plan suggests that the countermeasures would be preferred if economic losses are above $74 billion, the probability of attack is larger than 0.37 in 10 years, and if the cost of the measures is less than about $14 billion. Our results imply that, using the most conservative of our estimates, a program with a cost consistent with their thresholds would yield significant aggregate net benefits.

Keywords: Economics and Finance; Environment; Politics and Public Policy (search for similar items in EconPapers)
Date: 2022
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