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 11: The Joplin tornado of 2011

Harry W. Richardson, JiYoung Park, Peter Gordon, Qisheng Pan and James E. Moore II

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


Despite the potential destruction that might result, tornadoes have not received much attention in natural disaster economic impact research, certainly compared with earthquakes, hurricanes and floods. There are several reasons for this. One is that there are more preventive and mitigating measures that can be adopted to deal with other types of natural disasters and one virtue of estimating the dollar value of economic impacts is that it offers some parameters of how much might be spent on prevention and mitigation using a cost-benefit approach. There is little that can be done to mitigate the effects of tornadoes other than construction improvements in terms of materials and incorporating basements in residential construction. It would be very difficult to do this within the framework of public policy; it could only be achieved by private sector (for example, individual or developer) actions. A second issue is that the geographical scope of most other natural disasters is much broader so that many more people are usually affected. Most disasters occur in urban areas whereas because of their limited spatial scale most tornadoes touch down in rural areas with sparse populations. Joplin is quite a small town but unusually large for a tornado-impacted area. Third, the location of a tornado is much less predictable.

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