Insurance and safety after September 11, 2001: Coming to grips with the costs and threats of terrorism

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• dc.contributor.author Hogarth, Robin M.
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2020-05-25T09:26:57Z
• dc.date.available 2020-05-25T09:26:57Z
• dc.date.issued 2002-10-01
• dc.date.modified 2020-05-25T09:19:38Z
• dc.description.abstract This chapter, originally written as a consequence of the terrorist attacks of September 11, 2001, provides an elementary, everyday introduction to the concepts of risk and insurance. Conceptually, risk has two dimensions: a potential loss, and the chance of that loss being realized. People can, however, transfer risk to insurance companies against the payment of so-called premiums. In practice, however, one needs accurate assessments of both losses and probabilities to judge whether premiums are appropriate. For many risks, this poses little problem (e.g., life insurance); however, it is difficult to assess risks of many other kinds of events such as acts of terrorism. It is emphasized, that through evolution and learning, people are able to handle many of the common risks that they face in life. But when people lack experience (e.g., new technologies, threats of terrorism), risk can only be assessed through imagination. Not surprisingly, insurance companies demand high prices when risks are poorly understood. In particular, the cost of insurance against possible acts of terrorism soared after September 11. How should people approach risk after the events of that day? Clearly, the world needs to protect itself from the acts of terrorists and other disturbed individuals. However, it is also important to address the root causes of such antisocial movements. It is, therefore, suggested that programs addressed at combatting ignorance, prejudice, and social inequalities may be more effective premiums for reducing the risk of terrosrtism than has been recognized to date.
• dc.format.mimetype application/pdf*
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=656
• dc.identifier.citation Social Science Research Council. Essays...Perspectives from the Social Sciences. SSRC webpage http://www.ssrc.org/sept11/essays/hogarth.htm)
• dc.identifier.uri http://hdl.handle.net/10230/1170
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 656
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword decision making
• dc.subject.keyword risk
• dc.subject.keyword insurance
• dc.subject.keyword terrorism
• dc.subject.keyword september 11
• dc.subject.keyword Behavioral and Experimental Economics
• dc.title Insurance and safety after September 11, 2001: Coming to grips with the costs and threats of terrorism
• dc.title.alternative Insurance and safety after September 11: Has the world become a "riskier" place?
• dc.type info:eu-repo/semantics/workingPaper