Insurance, Self-Protection, and the Economics of Terrorism

Darius Lakdawalla and George Zanjani

No 9215, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates the rationale for government intervention in the market for terrorism insurance, focusing on the externalities associated with self-protection. Self-protection by one target encourages terrorists to substitute towards less fortified targets. Investments in self- protection thus have negative external effects in the presence of rational terrorists. Government subsidies for terror insurance can discourage self-protection and limit the inefficiencies associated with these and other types of negative externalities. They may also serve as a complement to a policy of publicly provided protection.

JEL-codes: H0 (search for similar items in EconPapers)
Date: 2002-09
New Economics Papers: this item is included in nep-ias
Note: EH PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as Lakdawalla, Darius and George Zanjani. "Insurance, Self-Protection, And The Economics Of Terrorism," Journal of Public Economics, 2005, v89(9-10,Sep), 1891-1905.

Downloads: (external link)
http://www.nber.org/papers/w9215.pdf (application/pdf)

Related works:
Journal Article: Insurance, self-protection, and the economics of terrorism (2005)
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:nbr:nberwo:9215

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w9215

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().