Legal Commentary

Via the SSRN "spam," I just came across Kip Viscusi's new paper on "Valuing Risks of Death from Terrorism and Natural Disasters."  Here's the abstract:

This paper uses a random utility model to examine stated preferences for the valuation of public risks of fatalities from terrorist attacks and natural disasters. Traffic-related deaths serve as the common reference point in two series of pairwise risk-risk tradeoff choices. Even after taking into account differences in respondent risk beliefs, the nationally representative sample values preventing terrorism deaths almost twice as highly as preventing natural disaster deaths and at about the same level as preventing deaths from traffic accidents, which pose greater personal risk. Education, seat belt usage, political preferences, and terrorism risk beliefs affect valuations in the expected manner.

As Viscusi rightly points out, risks of terrorism-related deaths are rarely risks that are the product of market options (e.g., I should have bought that Volvo). I wonder if we can say the same is true for deaths resulting from natural disasters, where "choices" to live in "particularly sturdy housing" or dangerously located areas (near the coast) may affect the risks at issue. For what it's worth, I think the major reason reduction of terrorism-related deaths is justifiably prioritized has to do with the sense that "Terrorism attacks represent an attack on the country and involve commodity attributes that go beyond the number of lives lost." It seems to me that this one sentence is the heart of the matter (though it is curiously under-examined in the paper based on my admittedly quick read.)  In any event, Dan Solove and I batted around some of these issues here, which if you're interested in the social policy issues, you may want to check out.