A Framework for Analyzing the Economic Tradeoffs Between Urban Commerce and Security Against Terrorism

Authors

  • Adam Rose,

    Corresponding author
    1. National Center for Risk and Economic Analysis of Terrorism Events, University of Southern California, Los Angeles, CA, USA
    • Address correspondence to Adam Rose, National Center for Risk and Economic Analysis of Terrorism Events, University of Southern California, Los Angeles, CA 90089, USA; tel: (213) 740-1716; adamzros@price.usc.edu.

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  • Misak Avetisyan,

    1. National Center for Risk and Economic Analysis of Terrorism Events, University of Southern California, Los Angeles, CA, USA
    2. Department of Economics, Texas Tech University, Lubbock, TX, USA
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  • Samrat Chatterjee

    1. National Center for Risk and Economic Analysis of Terrorism Events, University of Southern California, Los Angeles, CA, USA
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Abstract

This article presents a framework for economic consequence analysis of terrorism countermeasures. It specifies major categories of direct and indirect costs, benefits, spillover effects, and transfer payments that must be estimated in a comprehensive assessment. It develops a spreadsheet tool for data collection, storage, and refinement, as well as estimation of the various components of the necessary economic accounts. It also illustrates the usefulness of the framework in the first assessment of the tradeoffs between enhanced security and changes in commercial activity in an urban area, with explicit attention to the role of spillover effects. The article also contributes a practical user interface to the model for emergency managers.

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