Using Probabilistic Terrorism Risk Modeling For Regulatory Benefit-Cost Analysis

Application to the Western Hemisphere Travel Initiative Implemented in the Land Environment

by Tom LaTourrette, Henry H. Willis

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The Intelligence Reform and Terrorism Prevention Act of 2004 requires that the Secretary of Homeland Security develop a plan for reliably evaluating the identity and citizenship of people entering the U.S. In response, the U.S. Customs and Border Protection (CBP) and U.S. Department of State are proposing a regulation specifying documentation requirements for people entering the U.S. via land borders from countries in the Western Hemisphere, referred to as the Western Hemisphere Travel Initiative (WHTI-L). The White House Office of Management and Budget directs agencies to use benefit-cost analyses to evaluate proposed regulations during the regulatory review process. However, data and methods for estimating the benefits of terrorism security regulations like the WHTI-L are inadequate to support benefit-cost analysis. This report introduces a framework for using probabilistic terrorism risk modeling in a break-even analysis of a regulatory action, demonstrates an application of the framework on the regulatory analysis of WHTI-L, and discusses how this type of analysis can be further integrated into the regulatory review process.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Using Probabilistic Risk Modeling In Regulatory Benefit-Cost Analysis

  • Chapter Three

    Application of Probabilistic Terrorism Modeling to Break-Even Benefit-Cost Analysis of WHTI-L

  • Chapter Four

    Discussion

  • Chapter Five

    Summary and Conclusions

  • Appendix

    The RMS Probabilistic Terrorism Model

The research described in this report was prepared for Industrial Economics, Inc. by the RAND Center for Terrorism Risk Management Policy.

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