Valuing Risks of Death from Terrorism and Natural Disasters
37 Pages Posted: 14 Mar 2009
Date Written: March 13, 2009
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.
Keywords: risk tradeoffs, terrorism, natural disasters, dread, Hurricane Katrina, 9/11 attack
JEL Classification: D61, D62, D64, H41, H56
Suggested Citation: Suggested Citation