Residual Risk Accounting: A Pilot Study of the Coastal Sector

Robert Farrow

No 14-01, UMBC Economics Department Working Papers from UMBC Department of Economics

Abstract: Risks continue near the coasts such as flooding, oil spills, deaths and unemployment despite numerous policies to prevent and mitigate their effects. Such policies are typically analyzed in their natural units, such as jobs, and so comparisons are difficult across risk categories. An approach similar to supplemental national income and product accounting allows direct comparison of the relative importance and variability of these residual risks. Results for the coastal sector highlight the stability and large expected annual costs associated with some activities such as recreational boating fatalities. In contrast, other categories such as oil spills and flooding exhibit high variability and in the case of flooding, a high level of damages. The results are useful in the strategic development of regulations, causal models and policy design.

Keywords: Risk accounting; shadow price; flood; VSL; unemployment (search for similar items in EconPapers)
JEL-codes: D60 E01 Q00 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2014-01
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