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The Economics Of Homeland Security Expenditures: Foundational Expected Cost-Effectiveness Approaches




"While most economists expect some marginal conditions to result from basic expected value models involving government expenditures and homeland security investments, such models are not readily found in the literature. The article presents six basic models that all incorporate uncertainty; they also capture various problems involving technological limits, behavioral interactions, false negatives and false positives, and decision making with uncertainty and irreversibility. Recent reviews of homeland security programs by the U.S. Government Accountability Office are used to illustrate the relevance of the models."("JEL" H100) Copyright 2006 Western Economic Association International.

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  • Scott Farrow, 2007. "The Economics Of Homeland Security Expenditures: Foundational Expected Cost-Effectiveness Approaches," Contemporary Economic Policy, Western Economic Association International, vol. 25(1), pages 14-26, January.
  • Handle: RePEc:bla:coecpo:v:25:y:2007:i:1:p:14-26

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    References listed on IDEAS

    1. Kunreuther, Howard & Heal, Geoffrey, 2003. "Interdependent Security," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 231-249, March-May.
    2. Graham, Daniel A, 1981. "Cost-Benefit Analysis under Uncertainty," American Economic Review, American Economic Association, vol. 71(4), pages 715-725, September.
    3. Machina, Mark J, 1987. "Choice under Uncertainty: Problems Solved and Unsolved," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 121-154, Summer.
    4. L. Eeckhoudt & C. Gollier & H. Schlesinger, 2005. "Economic and financial decisions under risk," Post-Print hal-00325882, HAL.
    5. Arrow, Kenneth J & Lind, Robert C, 1970. "Uncertainty and the Evaluation of Public Investment Decisions," American Economic Review, American Economic Association, vol. 60(3), pages 364-378, June.
    6. Farrow, Scott & Morel, Benoit, 2001. "Continuation rights, precautionary principle, and global change," Risk, Decision and Policy, Cambridge University Press, vol. 6(03), pages 145-155, December.
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    Cited by:

    1. Scott Farrow & W. Kip Viscusi, 2013. "Towards principles and standards for the benefit–cost analysis of safety," Chapters,in: Principles and Standards for Benefit–Cost Analysis, chapter 5, pages 172-193 Edward Elgar Publishing.
    2. Kevin Boyle & Sapna Kaul & Ali Hashemi & Xiaoshu Li, 2015. "Applicability of benefit transfers for evaluation of homeland security counterterrorism measures," Chapters,in: Benefit–Cost Analyses for Security Policies, chapter 10, pages 225-253 Edward Elgar Publishing.
    3. Scott Farrow & Stuart Shapiro, 2009. "The Benefit-Cost Analysis of Security Focused Regulations," UMBC Economics Department Working Papers 09-101, UMBC Department of Economics.
    4. Scott Farrow, 2015. "A comparison of key benefit estimation issues for natural hazards and terrorism: ex ante/ex post valuation and endogenous risk," Chapters,in: Benefit–Cost Analyses for Security Policies, chapter 6, pages 140-154 Edward Elgar Publishing.

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