Geoscience Reference
In-Depth Information
less likely because of (misplaced) fear of lingering contamination. One would also
need to consider the extent to which the attack site is seen as a prime target for
future attacks, contributing to persistent stigma.
Conclusions
We have developed a regional CGE model to analyze the time-path of the
economic impacts of a terrorist attack. The model was applied to estimating
the standard resource loss and behavioral impacts of a chlorine gas attack on the
LA financial district. The results indicate that behavioral effects, stemming from
the social amplification of risk and stigma affects, dominate. The ratio of Total
Ten-Year Behavioral to Ordinary Losses is greater than 35. Moreover, the ratio
of Total Ten-Year Behavioral/to Short-Run Direct Business Interruption is
nearly 60. The model was designed to capture critical economic relationships
pertaining to severe shocks, including migration, capital stock damage, and
investment. The extent to which the relocation of business activity could affect
the results was also explored. Behavioral responses were incorporated into the
model by estimating the impacts of worker wage premiums, investment
premiums, and shopper discounts required to induce economic agents to return
to the impacted area. The empirical basis for the behavioral analysis was a
survey of respondents reacting to a simulated chlorine gas attack. Adverse
behavioral impacts are large but may be less costly to mitigate than are the
various types of interdiction of terrorism and hardening of targets. Improved risk
communication regarding the severity of the chlorine gas threat and its remedia-
tion has the potential to significantly quell fears that would otherwise translate
into sizable negative economic impacts.
References
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