National Economic Impact Analysis of Terrorist Attacks and Natural Disasters

National Economic Impact Analysis of Terrorist Attacks and Natural Disasters

Edited by Harry W. Richardson, Jiyoung Park, James E. Moore II and Qisheng Pan

This book develops a national economic impact model to estimate the effects of simulated terrorist attacks and natural disasters on individual US States and economic sectors. The model, called NIEMO (The National Interstate Economic Model) looks at interindustry relationships and interregional trade. It is highly disaggregated making the model very accurate. The authors examine potential attack targets including theme parks, sporting events, bridges and tunnels in the national highway system as well as attempts to shoot down airplanes or spread foot-and-mouth disease. Covered natural disasters are almost all real world: Hurricane Katrina, the Joplin Tornado, the Gulf Oil Spill and Hurricane Sandy. The effects on State economies caused by the closing international borders in response to a global pandemic is also examined.

Chapter 6: A stadium attack

Bumsoo Lee, Peter Gordon, James E. Moore II and Harry W. Richardson

Subjects: economics and finance, methodology of economics, environment, disasters, politics and public policy, political economy, terrorism and security


The application of standard economic impact models to the study of hypothetical terrorist attacks is not as straightforward as might be expected. The models are more powerful and user-friendly than ever. However, they are based on multipliers in search of appropriate multiplicands. Supplying the latter requires analysts to create plausible and detailed scenarios that can be fitted to the models. This is the nature of the research reported here. The purpose of this chapter is two-fold. First, we suggest an analytical framework to study the full economic impacts of hypothetical bioterrorist attacks on targets. In particular, we emphasize the importance of estimating economic impacts that occur through systems and behavior linkages beyond direct losses. Second, we provide a case study that analyses the economic impacts of a hypothetical bioterrorist attack on a major league sports stadium. Any large sports stadium is an attractive target for (bio)terrorist attacks because it is a place of mass public gatherings on a predictable basis, often with minimal security controls (Australian Government Attorney-General’s Department, 2006).

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