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 8: The National Economic Impacts of a Food Terrorism Event: Initial Estimates of Indirect Costs

Thomas F. Stinson

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


* Thomas F. Stinson Terrorist attacks create real losses for society. Quantifying those losses is a sobering, but important task since it provides vital information for policymakers to use as they choose how to allocate scarce public and private sector resources. Calculating the direct economic losses – the value of the lives and income lost and the business activity lost by firms in the industries and communities directly affected by any attack – is a relatively straightforward and useful first measure of the cost of the terrorists’ actions. Those losses will be catastrophic for many affected individuals and firms. But, while substantial at the micro level, they are likely to be small when viewed against the entirety of the US economy. Other losses will not be readily quantifiable. They include the psychological and emotional damage resulting from the attack. Those losses will be more widespread and are likely to extend well beyond the area immediately affected. In many instances those damages will be national in scope, for in the broadest sense we will all be victims of any future terrorist attack since each of us will lose some of the sense of security we once had. The psychological and emotional impacts that follow the attack are likely to influence consumer spending and business investment decisions and the performance of the entire US economy over an extended period. Terrorism’s follow-on impacts on the broader macro-economy are likely to be much larger than the losses suffered by those directly...

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