Benefit-Cost Analysis for Counter Terrorism

Benefit–cost analysis is a critical tool for decision-making in the public sector. However, such analyses are challenging when one of the benefits is deterrence of adaptive adversaries, as in counter-terrorism. In a paper recently published in Decision Analysis, Richard John and co-authors Robin Dillon, William Burns, and Nicholas Scurich developed a framework for calculating the value of deterrence investments aimed at mitigating attacks from adaptive adversaries.

The framework partitions countermeasure benefits into three components:

  • (1) threat reduction (deterrence),
  • (2) vulnerability reduction, and
  • (3) consequence mitigation.

In each case, the methodology represents benefits from:

  • (1) changes in attack probability (threat reduction from deterrence),
  • (2) changes in detection probability (vulnerability reduction), and
  • (3) changes in the distribution of attack outcomes (consequence mitigation).

The methodology explicitly accounts for deterrence, vulnerability reduction, and consequence mitigation in benefit–cost analyses. It provides quantifiable insights into how countermeasures reduce terrorism risk. The authors demonstrate its application to counter-measures to protect commercial aircraft against man-portable air defense systems.

The research was funded by the U.S. Department of Homeland Security.

CREATE’s research on adaptive adversaries includes:

Other CREATE research on MANPAD countermeasures includes:

Posted January 28, 2025