Cost-effectiveness of anti-terrorist spending 

 The Economist recently had an interesting article on anti-terrorist 
spending ( "Feel safer now?" , March-6 print edition).  The piece reports 
on research done by Todd Sandler and Daniel Arce on the costs and 
benefits of different responses to terrorism (paper  here ).  Terrorism creates a lot 
of anxiety but (so the authors say) actually costs few lives and many 
counter-measures might be ineffective, e.g. if terrorists just shift 
attacks to easier targets in response.  Sandler and Arce suggest most of 
their spending scenarios are not cost-effective, but that political 
cooperation could be worthwhile. 


 Not being an expert in this area, I suspect that the counterfactuals 
involved must be extremely hard to defend given the scope of 
transnational terrorism.  Similarly the reported bounds are huge and the 
underlying numbers should be up for debate.  For example while skimming 
through, I noticed that didn't see any accounting for psychological 
stress of those not directly involved in an attack (e.g. the general 
population), nor that of military personnel and families who implement 
some of the counter-measures.  Any views?