Valuing Risks of Death from Terrorism and Natural Disasters
W. Kip Viscusi
Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics
March 13, 2009
Vanderbilt Law and Economics Research Paper No. 09-08
This paper uses a random utility model to examine stated preferences for the valuation of public risks of fatalities from terrorist attacks and natural disasters. Traffic-related deaths serve as the common reference point in two series of pairwise risk-risk tradeoff choices. Even after taking into account differences in respondent risk beliefs, the nationally representative sample values preventing terrorism deaths almost twice as highly as preventing natural disaster deaths and at about the same level as preventing deaths from traffic accidents, which pose greater personal risk. Education, seat belt usage, political preferences, and terrorism risk beliefs affect valuations in the expected manner.
Number of Pages in PDF File: 37
Keywords: risk tradeoffs, terrorism, natural disasters, dread, Hurricane Katrina, 9/11 attack
JEL Classification: D61, D62, D64, H41, H56
Date posted: March 14, 2009
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