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The life satisfaction approach to valuing public goods: The case of terrorism


Frey, Bruno S; Luechinger, Simon; Stutzer, Alois (2009). The life satisfaction approach to valuing public goods: The case of terrorism. Public Choice, 138(3-4):317-345.

Abstract

Terrorism has large social costs that are difficult to quantify for the well-known problems of eliciting people’s preferences for public goods. We use the LSA to assess these costs in utility and monetary terms. Based on combined cross-section time-series data, we estimate the costs of terrorism for France and the British Isles. We find large negative effects of terrorism on life satisfaction that translate into considerable compensating surpluses for a hypothetical reduction in terrorism, in particular for the serious conflict in Northern Ireland. The effects of terrorism are robust and differ across groups in accordance with prior expectations.

Abstract

Terrorism has large social costs that are difficult to quantify for the well-known problems of eliciting people’s preferences for public goods. We use the LSA to assess these costs in utility and monetary terms. Based on combined cross-section time-series data, we estimate the costs of terrorism for France and the British Isles. We find large negative effects of terrorism on life satisfaction that translate into considerable compensating surpluses for a hypothetical reduction in terrorism, in particular for the serious conflict in Northern Ireland. The effects of terrorism are robust and differ across groups in accordance with prior expectations.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:March 2009
Deposited On:25 Jan 2010 12:02
Last Modified:05 Apr 2016 13:30
Publisher:Springer
ISSN:0048-5829
Additional Information:The original publication is available at www.springerlink.com
Publisher DOI:https://doi.org/10.1007/s11127-008-9361-3

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