The Economic Impacts of Terrorist Attacks

The Economic Impacts of Terrorist Attacks

Edited by Harry W. Richardson, Peter Gordon and James E. Moore II

Focussing on the economics of terrorism in the post 9/11 world, this book brings together original research based on the collaborative efforts of leading economists and planners. The authoritative and expert contributors use a variety of methodological approaches and apply them to different types of terrorist attacks (on airports, highways, seaports, electric power infrastructure, for example).

Chapter 1: Introduction

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

Subjects: economics and finance, public sector economics, transport, environment, disasters, transport, politics and public policy, terrorism and security, urban and regional studies, transport

Extract

Harry W. Richardson, Peter Gordon and James E. Moore II Since 9/11 there has been considerable speculation and research about future potential terrorist attacks on the United States. Interestingly, and perhaps predictably, much of this research has focused on the cost of human lives and psychological effects rather than more direct economic impacts. Yet there is little doubt that both the economic costs of protection and the potential economic damage from certain types of terrorist attacks could be substantial. This book focuses on some of these issues. It is the result of one of the first activities of CREATE (the Center for Risk and Economic Analysis of Terrorism Events) established at the University of Southern California by the US Department of Homeland Security. This was a conference held in August 2004 that brought together economists and planners from around the country who have developed research interests in terrorism and its economic impacts. There was a spate of studies after 9/11 (for example, Glaeser and Shapiro, 2001) that considered the problem of whether the attack would lead to a reassessment of corporate location decisions with firms choosing sites less visible than downtown (or midtown) Manhattan. It did not happen, mainly because of a widespread and probably justified belief that future terrorist attacks would diversify rather than repeat the same kind of targets. ‘Extreme events’ are characterized by non-linear responses, low probabilities, high consequences and the potential for systems interaction that may lead to catastrophic losses. Terrorist acts are probably...