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 13: West Coast ports shutdown

JiYoung Park, 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

Extract

The terrorist attack of 2001 prompted renewed interest in port security. The 11-day shutdown of the West Coast ports in 2002 as a result of the lock-out of potentially striking port workers was a natural experiment leading to considerable economic losses. It is not accurate to treat an economic impact analysis of the ports shutdown case as if it was the same as a terrorist attack because the predictable nature of a labor action makes it different. However, it remains possible to study the extent to which substitutions were made because the experience may have informed important contingency planning by shippers. The purpose of this study is to examine the extent to which the event’s impacts were mitigated via substitutions over time, by mode and by port. Attacks on key operational ports such as the Los Angeles and Long Beach twin ports, for example, by dirty bombs, may have profound noneconomic as well as economic consequences from direct losses of lives and commodities. Also, during the time that any leaked radiation is cleaned up, the ports and areas around the ports would be shut down resulting in substantial indirect economic losses (Gordon et al., 2005).

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