Measurement and Selection of Defense

The paper suggests a measure of the value of defense; namely, reduction in the cost of repairing or replacing capital items subjected to attack. Using this measure, a decision rule is advanced that allows calculation of how much resource to devote to defense. The suggested decision rule is argued to be superior to two alternatives: a budget rule that maximizes defense subject to a budget constraint, and a requirements rule that minimizes cost subject to a required level of defense. The practical use of the suggested decision rule is discussed and some possible applications given. (Author)