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Value of Global Catastrophic Risk (GCR) Information: Cost-Effectiveness-Based Approach for GCR Reduction

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  • Anthony Michael Barrett

    () (Global Catastrophic Risk Institute, Washington, DC 20016)

Abstract

In this paper, we develop and illustrate a framework for determining the potential value of global catastrophic risk (GCR) research in reducing uncertainties in the assessment of GCR levels and the effectiveness of risk-reduction options. The framework uses the decision analysis concept of the expected value of perfect information in terms of the cost-effectiveness of GCR reduction. We illustrate these concepts using available information on impact risks from two types of near-Earth objects (asteroids or extinct comets) as well as nuclear war, and consideration of two risk-reduction measures. We also discuss key challenges in extending the calculations to all GCRs and risk-reduction options, as part of an agenda for comprehensive, integrated GCR research. While real-world research would not result in perfect information, even imperfect information could have significant value in informing GCR-reduction decisions. Unlike most value of information approaches, our equation for calculating value of information is based on risk-reduction cost-effectiveness, to avoid implicitly equating lives and dollars, e.g., using a value of statistical life (VSL), which may be inappropriate given the scale of GCRs. Our equation for value of information may be useful in other domains where VSLs would not be appropriate.

Suggested Citation

  • Anthony Michael Barrett, 2017. "Value of Global Catastrophic Risk (GCR) Information: Cost-Effectiveness-Based Approach for GCR Reduction," Decision Analysis, INFORMS, vol. 14(3), pages 187-203, September.
  • Handle: RePEc:inm:ordeca:v:14:y:2017:i:3:p:187-203
    DOI: 10.1287/deca.2017.0350
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    File URL: https://doi.org/10.1287/deca.2017.0350
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    References listed on IDEAS

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    1. Seth D. Baum, 2012. "Value Typology in Cost-Benefit Analysis," Environmental Values, White Horse Press, vol. 21(4), pages 499-524, November.
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    3. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
    4. Milan M. Ćirković & Anders Sandberg & Nick Bostrom, 2010. "Anthropic Shadow: Observation Selection Effects and Human Extinction Risks," Risk Analysis, John Wiley & Sons, vol. 30(10), pages 1495-1506, October.
    5. Jeffrey Keisler, 2004. "Value of Information in Portfolio Decision Analysis," Decision Analysis, INFORMS, vol. 1(3), pages 177-189, September.
    6. Joseph E. Aldy & Scott Barrett & Robert N. Stavins, 2003. "Thirteen plus one: a comparison of global climate policy architectures," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 373-397, December.
    7. Jason G. Matheny, 2007. "Reducing the Risk of Human Extinction," Risk Analysis, John Wiley & Sons, vol. 27(5), pages 1335-1344, October.
    8. Debarun Bhattacharjya & Jo Eidsvik & Tapan Mukerji, 2013. "The Value of Information in Portfolio Problems with Dependent Projects," Decision Analysis, INFORMS, vol. 10(4), pages 341-351, December.
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    Cited by:

    1. Carlo Drago & Matteo Ruggeri, 2019. "Setting research priorities in the field of emergency management: which piece of information are you willing to pay more?," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 2103-2115, July.

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