Averting Catastrophes: The Strange Economics of Scylla and Charybdis

Ian Martin and Robert Pindyck

American Economic Review, 2015, vol. 105, issue 10, 2947-85

Abstract: Faced with numerous potential catastrophes—nuclear and bioterrorism, mega-viruses, climate change, and others—which should society attempt to avert? A policy to avert one catastrophe considered in isolation might be evaluated in cost-benefit terms. But because society faces multiple catastrophes, simple cost-benefit analysis fails: even if the benefit of averting each one exceeds the cost, we should not necessarily avert them all. We explore the policy interdependence of catastrophic events, and develop a rule for determining which catastrophes should be averted and which should not. (JEL D61, Q51, Q54)

JEL-codes: D61 Q51 Q54 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20140806
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.20140806 (application/pdf)
http://www.aeaweb.org/aer/ds/10510/20140806_ds.zip (application/zip)
http://www.aeaweb.org/aer/data/10510/20140806_data.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Averting Catastrophes: The Strange Economics of Scylla and Charybdis (2015)
Working Paper: Averting catastrophes: the strange economics of Scylla and Charybdis (2015)
Working Paper: Averting Catastrophes: The Strange Economics of Scylla and Charybdis (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:105:y:2015:i:10:p:2947-85

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().