Table of Contents

The Economic Costs and Consequences of Terrorism

The Economic Costs and Consequences of Terrorism

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

This landmark book covers a range of issues concerning the consequences of terrorist attacks. Beginning with a discussion of new policies and strategies, it then delves into specific areas of concern, modeling a range of possible scenarios and ways to mitigate or pre-empt damages.

Chapter 1: Introduction

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

Subjects: economics and finance, public sector economics, environment, disasters, politics and public policy, terrorism and security


Harry W. Richardson, Peter Gordon and James E. Moore II This book is the second edited volume in a series about the economic consequences of terrorist attacks. The first was published in 2005, The Economic Impacts of Terrorist Attacks (Edward Elgar Publishing). It consisted (in addition to the Introduction) of 15 chapters by economists and others with expertise on terrorist issues, some but not all of them associated with CREATE (the Center for Risk and Economic Analysis of Terrorism Events) at the University of Southern California and sponsored by the US Department of Homeland Security. The book covered a variety of topics: transnational terrorism, air baggage security, electricity supply, biological attacks, homeland security communications, terrorist threat impacts on land values, container inspections, port security, radiological bomb attacks and destruction of bridges at the ports, the bombing of major highway bridges and modeling research (cost–benefit analysis and computable general equilibrium analysis). This volume returns to some of the same topics and some of the same authors, but also expands the range of both topics and authors. Deterrence has been a crucial element in fighting terrorism. But in some cases there may be superior strategies to deterrence. In chapter 2, Frey and Luechinger suggest three policies, which could easily be compatible with the existing constitutions of democratic and rule-based countries. Two policies are based on diminishing the marginal benefit of terrorist acts for prospective terrorists. This can be done by decentralizing various parts of the economy or by diverting...