Estimating the Benefits of Homeland Security Policies Organized by Kerry Smith & Carol Mansfield

Date: September 25, 2010

Researchers from The University of Southern California's (USC) National Center for Risk and Economic Analysis of Terrorism Events (CREATE) hosted a workshop on the challenge of estimating the economic benefits of homeland security policies. CREATE researchers Kerry Smith (Arizona State University) and Carol Mansfield (RTI International), along with colleague Paramita Sinha (RTI International), organized the workshop, which provided different perspectives on framing benefit analyses, defining what the benefits are and who experiences the benefits, and transferring estimates obtained from studies on other topics to the area of homeland security.

The speakers addressed the need to develop a framework within which to assess the benefits of DHS policies, developing analysis capacity, benefit transfer, natural hazards, and the distinction between ex ante and ex post perspectives. Several speakers addressed issues associated with the measurement of the economic value of time and the estimation of the value of a statistical life and it relevance for the context of homeland security policy. Finally, the European perspective and experience in the United Kingdom presented an alternative perspective. Along the way, the audience of DHS analysts, academics and government consultants exchanged real world examples and debated the merits of different approaches to benefit analysis.

The workshop ended with some specific recommendations for DHS:

1) Establish an Economic Advisory Committee of outside experts

2) Commit to writing down a strategy for benefit analysis: what could be the guiding framework (Risk management? Preparedness? Resilience?)? What methods can be used? What skill sets and research are needed? What short-term incremental improvements can be made?

3) Consider both micro-economic and macro-economic studies and data

4) Use DHS databases of terrorist events to study the consequences of these events for the economy and society with goal of improving assumptions and understanding possible outcomes.

5) Continue work on what factors induce people to become terrorists and, once committed to such activityto understand how these terrorists decide to pursue different types of attacks

For more information, contact:

RTI International