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Insurance, Self-Protection, And The Economics Of Terrorism, Darius Lakdawalla, George Zanjani Aug 2005

Insurance, Self-Protection, And The Economics Of Terrorism, Darius Lakdawalla, George Zanjani

Darius N. Lakdawalla

This paper investigates the rationale for public intervention in the terrorism insurance market. It argues that government subsidies for terror insurance are aimed, in part, at discouraging self-protection and limiting the negative externalities associated with self-protection. Cautious self-protective behavior by a target can hurt public goods like national prestige if it is seen as “giving in” to the terrorists, and may increase the loss probabilities faced by others by encouraging terrorists to substitute toward more vulnerable targets. We argue that these externalities are essential for normative analysis of government intervention and may also explain why availability problems in this market …


United States Public Response To Terrorism: Fault Lines Or Bedrock?, Hank C. Jenkins-Smith, Kerry G. Herron Dec 2004

United States Public Response To Terrorism: Fault Lines Or Bedrock?, Hank C. Jenkins-Smith, Kerry G. Herron

Hank C Jenkins-Smith

We test traditional assumptions about the volatility of mass opinion in times of national crises using data about views of terrorism from national surveys of the United States general public in 1995 and 1997, findings from a national survey immediately following the terrorist attacks of September 11, 2001 (9/11), and panel data from a follow-up survey in 2002. We compare public assessments of the threat of terrorism, willingness to restrict speech to prevent terrorism, support for employing conventional military force against countries that support terrorism, and levels of certainty about culpability required prior to using military force. Results show stable …