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

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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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Authors and Affiliations

  1. Institute for Empirical Research in Economics, University of Zurich, Winterthurerstr. 30, 8006, Zurich, Switzerland

    Bruno S. Frey & Simon Luechinger

  2. Department of Business and Economics, University of Basel, Petersgraben 51, 4003, Basel, Switzerland

    Alois Stutzer

Authors
  1. Bruno S. Frey
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  2. Simon Luechinger
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  3. Alois Stutzer
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Correspondence to Bruno S. Frey.

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This is a substantially revised version of our original paper with the same title based on an extended data basis.

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Frey, B.S., Luechinger, S. & Stutzer, A. The life satisfaction approach to valuing public goods: The case of terrorism. Public Choice 138, 317–345 (2009). https://doi.org/10.1007/s11127-008-9361-3

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  • DOI: https://doi.org/10.1007/s11127-008-9361-3

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