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Residual Risk Accounting: A Pilot Study of the Coastal Sector


  • Scott Farrow

    () (UMBC)


Risks continue near the coasts such as flooding, oil spills, deaths and unemployment despite numerous policies to prevent and mitigate their effects. Such policies are typically analyzed in their natural units, such as jobs, and so comparisons are difficult across risk categories. An approach similar to supplemental national income and product accounting allows direct comparison of the relative importance and variability of these residual risks. Results for the coastal sector highlight the stability and large expected annual costs associated with some activities such as recreational boating fatalities. In contrast, other categories such as oil spills and flooding exhibit high variability and in the case of flooding, a high level of damages. The results are useful in the strategic development of regulations, causal models and policy design.

Suggested Citation

  • Scott Farrow, 2014. "Residual Risk Accounting: A Pilot Study of the Coastal Sector," UMBC Economics Department Working Papers 14-01, UMBC Department of Economics.
  • Handle: RePEc:umb:econwp:1401

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    References listed on IDEAS

    1. Richard Carson & Robert Mitchell & Michael Hanemann & Raymond Kopp & Stanley Presser & Paul Ruud, 2003. "Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez Oil Spill," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(3), pages 257-286, July.
    2. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    3. Timothy J. Bartik, 2012. "Including Jobs in Benefit-Cost Analysis," Annual Review of Resource Economics, Annual Reviews, vol. 4(1), pages 55-73, August.
    4. Nicholas Z. Muller & Robert Mendelsohn & William Nordhaus, 2011. "Environmental Accounting for Pollution in the United States Economy," American Economic Review, American Economic Association, vol. 101(5), pages 1649-1675, August.
    5. William D. Nordhaus & James Tobin, 1972. "Economic Research: Retrospect and Prospect, Volume 5, Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number nord72-1, January.
    6. repec:reg:rpubli:282 is not listed on IDEAS
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    More about this item


    Risk accounting; shadow price; flood; VSL; unemployment;

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • D60 - Microeconomics - - Welfare Economics - - - General
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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