Assessing security measures reducing terrorist risk: inverse ex post cost-benefit and cost-effectiveness analyses of Norwegian airports and seaports

Abstract

When the risks of unwanted events and the impacts of countermeasures are well-known, an economic assessment would compare the costs of the measures with the benefits of reduced risk. For evaluating countermeasures against terrorist attacks this is, however, not straight-forward. Both the baseline risk of terrorist attacks and the possible risk-reducing impacts of the security measures adopted are largely unknown. A possible approach to the economic assessment in such cases is to adopt inverse ex post economic analyses. Inverse ex post analysis in our case will be an assessment of already implemented security measures at Norwegian airports/seaports, trying to inversely estimate implicit benefits for estimated terror risks and risk changes due to the implemented measures. Such implicit benefits might be measured as implicit costs of lives saved or, more generally, as an implicit value of what is protected in airports and in seaports. Our analysis indicates that for justifying the costs of the implemented security measures, it implies huge cost per life saved and a quite enormous valuation of what the measures protect. A low estimated baseline risk of terror attacks explains to a large degree these findings. Nevertheless, even if fatalities represent a major societal cost of terrorist attacks, there are other potential costs regarding infrastructure, that to a large degree have been disregarded in our analyses. If all potential societal costs could be included, this would justify a higher level of security spending, but not necessarily the levels that our estimates indicate.

Terrorism Risks and Cost‐Benefit Analysis of Aviation Security

“…(19,20) Hence, we will undertake a breakeven cost-benefit analysis in this article. Although the framework for cost-benefit applications to homeland security has been well described, (35,36,37) there are few quantitative studies of risk reductions for security measures currently in place in the United States and elsewhere. The novel aspect of this article is its attempt to quantify the risk reduction of each of the TSA layers of aviation security, and then to assess whether FAMS, FFDOs, and IPSBs reduce risk enough to justify their costs.…”

Beyond a series of security nets: applying STAMP & STPA to port security

“…Such attempts at enhancing port security may be insufficient or ineffective, as U.S. Secretary of Homeland Security Jeh Johnson describes the 100% container scanning mandate as 'highly improbable, hugely expensive [and] not the best use of taxpayer resources to meet this country's port and homeland security needs' (Barnes, 2014). And, as Akhtar, et. al.…”

“…Provides multi-source information flows that analyze behavioral patterns to more quickly identify potential threats (Frittelli, 2005) & develops maritime security Analytical approaches to port security are similarly varied. A risk management approach seeks to minimize the product of the probability of attack (e.g., threat), the conditional probability of a successful attack (e.g., vulnerability) and the expected value of losses (e.g., consequences) (Akhtar, Bjørnskau, & Veisten, 2010;Ghafoori & Altiok, 2012). Another risk-management based approach uses decision-tree analysis and heuristic, subjective risk and consequence estimates to graphically compare expected values of resilience strategies for various natural, technological or human disruption (Mansouri, Nilchiani, & Mostashari, 2010).…”

“…Assuming accurate knowledge of income, cost of security and probability of adversaries exploiting a port to (trans)ship dangerous cargo, (Gkonis & Psaraftis, 2010) use game theory to optimize assumed rational decisions to purchase equipment that enables 100% scanning of cargo. Akhtar, et al (2010) use Monte Carlo simulations based on subjective assessments of uncertainty distributions for key variables (e.g., the frequency of adversary attack) to assess the benefit and risk reduction of security measures implemented at Norwegian seaports. Burns (2013) offers econometric models to optimally allocate security resources across supply chains composed of an ever widening disparity of socio-economically successful countries.…”

“…Post-9/11 traditional approaches to port security tend to fixate on protecting against external threats (e.g., terrorists) at the expense of identifying 'potentially serious flaws in the [port] system' (O'Connell, 2009, p. 145) itself or ensuring information flows across interagency interfaces to decision-makers (U.S. Department of Homeland Security, 2005a). Inconsistent and disparate port security metrics ('overall vulnerability index' (Chatterjee, 2003) or risk reduction (Akhtar et al, 2010), for example) lead to additional confusion between espoused national security standards and site-specific security implementation (Frittelli, 2005). Port security is also hampered by assuming the U.S. Coast Guard can effectively implement large scale anti-terrorist programs that fall well outside of its legacy of preventing drug smuggling and cargo theft (Chatterjee, 2003).…”