Valuing the Risk of Death from Terrorist Attacks

Lisa Robinson (), James Hammitt, Aldy Joseph E., Krupnick Alan and Baxter Jennifer
Additional contact information
Aldy Joseph E.: Harvard Kennedy School
Krupnick Alan: Resources for the Future
Baxter Jennifer: Industrial Economics, Incorporated

Journal of Homeland Security and Emergency Management, 2010, vol. 7, issue 1, 27

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.

Keywords: value per statistical life; benefit-cost analysis; homeland security; regulation (search for similar items in EconPapers)
Date: 2010
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DOI: 10.2202/1547-7355.1626

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