TY - JOUR AU - Smith,V. Kerry AU - Mansfield,Carol AU - Clayton,Laurel TI - Valuing a Homeland Security Policy: Countermeasures for the Threats from Shoulder Mounted Missiles JF - National Bureau of Economic Research Working Paper Series VL - No. 14325 PY - 2008 Y2 - September 2008 UR - http://www.nber.org/papers/w14325 L1 - http://www.nber.org/papers/w14325.pdf N1 - Author contact info: V. Kerry Smith Department of Economics W.P. Carey School of Business P.O. Box 879801 Arizona State University Tempe, AZ 85287-9801 Tel: 480/727-9812 Fax: 480/965-0748 E-Mail: kerry.smith@asu.edu Carol Mansfield RTI International 3040 Cornwallis Rd. PO Box 12194 Research Triangle Park, NC 27709 E-Mail: carolm@rti.org Laurel Clayton RTI International 3040 Cornwallis road Research Triangle Park, N.C. 27709 E-Mail: lclayton@rti.org AB - This paper reports estimates for the ex ante tradeoffs for three specific homeland security policies that all address a terrorist attack on commercial aircraft with shoulder mounted missiles. Our analysis focuses on the willingness to pay for anti-missile laser jamming countermeasures mounted on commercial aircraft compared with two other policies as well as the prospect of remaining with the status quo. Our findings are based a stated preference conjoint survey conducted in 2006 and administered to a sample from Knowledge Networks' national internet panel. The estimates range from $100 to $220 annually per household. Von Winterfeldt and O'Sullivan's [2006] analysis of the same laser jamming plan suggests that the countermeasures would be preferred if economic losses are above $74 billion, the probability of attack is larger than 0.37 in ten years, and if the cost of the measures is less than about $14 billion. Our results imply that, using the most conservative of our estimates, a program with a cost consistent with their thresholds would yield significant aggregate net benefits. More generally, this research grows out of a need to measure the benefits of an iconic public good -- national defense -- to assess the economic efficiency of Department of Homeland Security policies. ER -