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Ex Ante and Ex Post Values for Changes in Risks
Author(s) -
Freeman A. Myrick
Publication year - 1989
Publication title -
risk analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.972
H-Index - 130
eISSN - 1539-6924
pISSN - 0272-4332
DOI - 10.1111/j.1539-6924.1989.tb00996.x
Subject(s) - ex ante , actuarial science , valuation (finance) , risk assessment , event (particle physics) , economics , adverse effect , risk analysis (engineering) , business , medicine , finance , physics , management , quantum mechanics , macroeconomics
In this paper, I take risk to mean a composite of the probability of an adverse event and the severity of the consequences of the event. I explore two issues in the economic valuation of changes in individual risks brought about by public policies. These are: (1) the relationship between the values of risk prevention (i.e., the lowering of the probabilities of adverse events) and risk reduction (i.e., the reduction of the severity of the consequences of adverse events); and (2) the relationship between ex ante and ex post measures of the value of changes in risk.