A risk and cost-benefit assessment of United States aviation security measures (original) (raw)
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Terrorism Risks and Cost-Benefit Analysis of Aviation Security
Risk Analysis, 2013
We evaluate, for the U.S. case, the costs and benefits of three security measures designed to reduce the likelihood of a direct replication of the 9/11 terrorist attacks. To do so, we assess risk reduction, losses, and security costs in the context of the full set of security layers. The three measures evaluated are installed physical secondary barriers (IPSB) to restrict access to the hardened cockpit door during door transitions, the Federal Air Marshal Service (FAMS), and the Federal Flight Deck Officer (FFDO) Program. In the process, we examine an alternate policy measure: doubling the budget of the FFDO program to 44millionperyear,installingIPSBsinallU.S.aircraftatacostof44 million per year, installing IPSBs in all U.S. aircraft at a cost of 44millionperyear,installingIPSBsinallU.S.aircraftatacostof13.5 million per year, and reducing funding for FAMS by 75% to $300 million per year. A break-even cost-benefit analysis then finds the minimum probability of an otherwise successful attack required for the benefit of each security measures to equal its cost. We find that the IPSB is costeffective if the annual attack probability of an otherwise successful attack exceeds 0.5% or one attack every 200 years. The FFDO program is costeffective if the annual attack probability exceeds 2%. On the other hand, more than two otherwise successful attacks per year are required for FAMS to be costeffective. A policy that includes IPSBs, an increased budget for FFDOs, and a reduced budget for FAMS may be a viable policy alternative, potentially saving hundreds of millions of dollars per year with consequences for security that are, at most, negligible.
An Economic Study of the US Post-9/11 Aviation Security
Open Journal of Business and Management, 2020
The Aviation Security world changed drastically following the terrorist attacks of September 11th, 2001. In this paper we look at 1) the changes that occurred to the aviation security sector and 2) how the United States aviation security compares to other parts of the world. Currently the United States has the most expensive aviation security infrastructure in the world. The main motivation of this topic was to find out why the United States was spending so much and assessing whether its aviation security sector was economically efficient. In this paper the authors provide the history of aviation security and the changes that took place post 9/11. A cost breakdown is presented and whether the amount of money being spent is worth the benefits received is discussed. This study also compares the United States' aviation security to that of Europe and Canada. These comparisons analyze how the total expenditure for the U.S. Transportation Security Administration (TSA) is similar/dissimilar to the aviation security expenditures in Europe and Canada. Recommendations for future budgets and tax revenues are also made. Overall, it is concluded that the amount of TSA's spending on aviation security is justified.
Cost-benefit analysis of airport security: Are airports too safe?
Journal of Air Transport Management, 2014
This paper assesses the risks and cost-effectiveness of measures designed to further protect airport terminals and associated facilities such as car parks from terrorist attack in the U.S., Europe, and the Asia-Pacific area. The analysis considers threat likelihood, the cost of security measures, hazard likelihood, risk reduction and expected losses to compare the costs and benefits of security measures to decide the optimal security measures to airports. Monte-Carlo simulation methods were used to propagate hazard likelihood, risk reduction and loss uncertainties in the calculation of net benefits that also allows probability of cost-effectiveness to be calculated. It is found that attack probabilities had to be much higher than currently observed to justify additional protective measures. Overall, then, it is questionable whether special efforts to further protect airports are sensible expenditures. Indeed, some relaxation of the measures already in place may well be justified.
Aviation security: Costing, pricing, finance and performance
Journal of Air Transport Management, 2015
This article provides an overview of economic issues pertaining to the costing, pricing, financing and performance of aviation security and an introduction to eight articles contributing to this special issue. Topics include benefit-cost analysis, production and input relationships, information flows, human factors and performance measurement, the role of technology, and risk-based security. We highlight resource allocation and measurement problems that are endemic to aviation security, and analyze the growing costs of aviation security over the last 15 years. We also provide data and analysis on financing that demonstrates significant differences in national approaches to the governance of aviation security and the economic consequences of such decisions.
Aviation Security, Risk Assessment, and Risk Aversion for Public Decisionmaking
Journal of Policy Analysis and Management, 2013
This paper estimates risk reductions for each layer of security designed to prevent commercial passenger airliners from being commandeered by terrorists, kept under control for some time, and then crashed into specific targets. Probabilistic methods are used to characterize the uncertainty of rates of deterrence, detection, and disruption, as well as losses. Since homeland security decisionmakers tend to be risk-averse because of the catastrophic or dire nature of the hazard or event, utility theory and Monte Carlo simulation methods are used to propagate uncertainties in calculations of net present value, expected utility, and probabilities of net benefit. We employ a "break-even" costbenefit analysis to determine the minimum probability of an otherwise successful attack that is required for the benefit of security measures to equal their cost. In this context, we examine specific policy options: including Improvised Physical Secondary Barriers (IPSBs) in the array of aircraft security measures, including the Federal Air Marshal Service (FAMS), and including them both. Attack probabilities need to exceed 260 percent or 2.6 attacks per year to be 90 percent sure that FAMS is cost-effective, whereas IPSBs have more than 90 percent chance of being cost-effective even if attack probabilities are as low as 6 percent per year. A risk-neutral analysis finds a policy option of adding IPSBs but not FAMS to the other measures to be preferred for all attack probabilities. However, a very risk-averse decisionmaker is 48 percent likely to prefer to retain FAMS even if the attack probability is as low as 1 percent per year-a level of risk aversion exhibited by few, if any, government agencies. Overall, it seems that, even in an analysis that biases the consideration toward the opposite conclusion, far too much may currently be spent on security measures to address the problem of airline hijacking, and many spending reductions could likely be made with little or no consequent reduction of security. C 2013 by the Association for Public Policy Analysis and Management.
2004
Following the terrorist attacks on September 11, 2001, the passage of the Aviation and Transportation Security Act mandated a substantial increase in resources devoted to aviation security. This paper summarizes the specific changes stemming from this legislation. In addition, the paper examines the economic issues underlying the regulation and provision of aviation security. The fact that security at one airport can affect the well being of those at other airports and elsewhere, an example of a network externality (spillover), provides an economic justification for governmental involvement in aviation security. A fundamental question is whether the federal role should be restricted to setting and monitoring security standards or whether the role should also include the financing and implementation of security. A controversial change is that the federal government has assumed responsibility from the airlines and airports for the actual provision of aviation security. Proponents of this change argue that, relative to private provision, public provision reduces the incentives to reduce quality through cost reductions. On the other hand, a public agency might not provide security services efficiently because it can operate in a moreor-less monopolistic way. Furthermore, a public agency might provide an excessive amount of security and incur unnecessary expenses because it is likely to be judged on its security record and not on all the attributes encompassed by air transportation services for consumers. Thus, economic theory does not provide a clear answer to what is likely to be a continuing source of controversythe appropriate scope of governmental involvement in aviation security. Cletus C. Coughlin is deputy director of research at the Federal Reserve Bank of St. Louis, Jeffrey P. Cohen is an assistant professor of economics at the Barney School of Business of the University of Hartford, and Sarosh R. Khan is a research associate at the Federal Reserve Bank of St. Louis. The authors thank Steven A. Morrison and Eran Segev for helpful comments.
The cost of airport security: The passenger dilemma
Journal of Air Transport Management, 2013
The cost of providing security in airports, especially in facilitating passenger throughput, has risen despite efforts to upgrade training and technology. The classic measure of passenger throughput assumes passengers are passive cogs in a carefully designed security matrix to optimize output. This perspective does not take into account passenger behavior, especially passenger negotiations during the screening process. To both clarify this social contextual process and estimate its differential costs on security screening, a case study emergent from the BEMOSA research project was arranged in an airport where both an ethnographic and 'time-motion' study were conducted. The results clearly showed the extent of negotiations that take place and the type of passenger most associated with delays in the "ideal" throughput scenario. Calculating direct costs of manpower associated with security screening of passengers and the different throughput times led to the conclusion that even though the "good passengers", those who pass through the security process in the minimum time, are the bulk of passenger throughput, "problematic" passengers who negotiate make up the bulk of the costs. These findings highlight the dilemma faced by security managers but also provide a window of opportunity to seek appropriate solutions.
The Benefit-Cost Analysis of Security Focused Regulations
Journal of Homeland Security and Emergency Management, 2000
Security focused regulations have been largely exempt from the benefit-cost type of analysis required for major Federal regulations and done routinely in areas such as transportation, environment and safety. Among the reasons offered for exemption are the analytical difficulties of security issues involving complex or poorly understood probabilities and consequences. This paper investigates the magnitude of security focused regulations, a framework for developing an expected cost analysis of regulations, and the current "break-even" analysis used by the Department of Homeland Security. Key assumptions implicit in the current analysis are identified and suggestions are made for the difficult evolution of security regulations toward a more explicit benefit-cost analysis.