title: The Role of Behavioral Responses in the Total Economic Consequences of Terrorist Attacks on U.S. Air Travel Targets.
abstract: U.S. airports and airliners are prime terrorist targets. Not only do the facilities and equipment represent high-value assets, but the fear and dread that is spread by such attacks can have tremendous effects on the U.S. economy. This article presents the methodology, data, and estimates of the macroeconomic impacts stemming from behavioral responses to a simulated terrorist attack on a U.S. airport and on a domestic airliner. The analysis is based on risk-perception surveys of these two scenarios. The responses relate to reduced demand for airline travel, shifts to other modes, spending on nontravel items, and savings of potential travel expenditures by U.S. resident passengers considering flying domestic routes. We translate these responses to individual spending categories and feed these direct impact results into a computable general equilibrium (CGE) model of the U.S. economy to ascertain the indirect and total impacts on both the airline industry and the economy as a whole. Overall, the estimated impacts on GDP of both types of attacks exceed $10B. We find that the behavioral economic impacts are almost an order of magnitude higher than the ordinary business interruption impacts for the airliner attack and nearly two orders of magnitude higher for the airport attack. The results are robust to sensitivity tests on the travel behavior of U.S. residents in response to terrorism.
authors.affiliation: National Center for Risk and Economic Analysis of Terrorism Events (CREATE), University of Southern California, Los Angeles, CA, USA.
authors.forename: Adam
authors.initials: A
authors.lastname: Rose
authors.affiliation: National Center for Risk and Economic Analysis of Terrorism Events (CREATE), University of Southern California, Los Angeles, CA, USA.|Texas Tech University, Department of Economics, Lubbock, TX, USA.
authors.forename: Misak
authors.initials: M
authors.lastname: Avetisyan
authors.affiliation: National Center for Risk and Economic Analysis of Terrorism Events (CREATE), University of Southern California, Los Angeles, CA, USA.
authors.forename: Heather
authors.initials: H
authors.lastname: Rosoff
authors.affiliation: Decision Research, Eugene, OR, USA.
authors.forename: William J
authors.initials: WJ
authors.lastname: Burns
authors.affiliation: Decision Research, Eugene, OR, USA.|University of Oregon, Department of Psychology, Eugene, OR, USA.
authors.forename: Paul
authors.initials: P
authors.lastname: Slovic
authors.affiliation: National Center for Risk and Economic Analysis of Terrorism Events (CREATE), University of Southern California, Los Angeles, CA, USA.
authors.forename: Oswin
authors.initials: O
authors.lastname: Chan
keywords: Airline travel demand; economic consequences of terrorism; risk perception and decision making