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Measuring the effects of the September 11 attack on New York City

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Author Info

  • Jason Bram
  • James Orr
  • Carol Rapaport

Abstract

The attack on the World Trade Center had an enormous financial, as well as emotional, impact on New York City. This article measures the short-term economic effects on the city's labor force and capital stock through June 2002, the end of the recovery process at the World Trade Center site. Using a lifetime-earnings loss concept, the authors estimate that the nearly 3,000 workers killed in the attack lost $7.8 billion in prospective income. Moreover, the employment impact in the key affected sectors - such as finance, air transportation, hotels, and restaurants - translated into an estimated earnings shortfall of $3.6 billion to $6.4 billion, while the cost of repairing and replacing the damaged physical capital stock and infrastructure totaled an estimated $21.6 billion. Accordingly, the authors determine that the total attack-related cost to New York City through June 2002 was between $33 billion and $36 billion. The article also examines the attack's effects on the city's most economically vulnerable residents and analyzes survey findings on the incidence of post-traumatic stress disorder and alcohol and drug use after September 11.

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Bibliographic Info

Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

Volume (Year): (2002)
Issue (Month): Nov ()
Pages: 5-20

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Handle: RePEc:fip:fednep:y:2002:i:nov:p:5-20:n:v.8no.2

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Related research

Keywords: Economic conditions - New York (N.Y.) ; Federal Reserve District; 2nd ; War - Economic aspects ; Terrorism ; Disaster relief;

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Citations

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Cited by:
  1. Jason Bram & Andrew Haughwout & James Orr, 2002. "Has September 11 affected New York City's growth potential?," Economic Policy Review, Federal Reserve Bank of New York, issue Nov, pages 81-96.
  2. Christopher J. Neely, 2003. "The Federal Reserve responds to crises: September 11th was not the first," Working Papers 2003-034, Federal Reserve Bank of St. Louis.
  3. Friedrich Schneider & Tilman Brück & Daniel Meierrieks, 2011. "The Economics of Terrorism and Counter-Terrorism: A Survey (Part I)," Economics of Security Working Paper Series 44, DIW Berlin, German Institute for Economic Research.
  4. Edgardo Barandiarán, 2003. "El Prestamista de Última Instancia en la Nueva Industria Bancaria," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(120), pages 337-358.
  5. James Harrigan & Philippe Martin, 2002. "Terrorism and the Resilience of Cities," Sciences Po publications info:hdl:2441/9286, Sciences Po.
  6. J. David Cummins & Michael Suher & George Zanjani, 1975. "Federal Financial Exposure to Natural Catastrophe Risk," NBER Chapters, in: Measuring and Managing Federal Financial Risk, pages 61-92 National Bureau of Economic Research, Inc.
  7. James Harrigan & Philippe Martin, 2002. "Terrorism and the resilience of cities," Economic Policy Review, Federal Reserve Bank of New York, issue Nov, pages 97-116.
  8. Fuerst, Franz, 2006. "The Aftermath of the 9/11 Attack in the New York City Office Market: A Review of Key Figures and Developments," MPRA Paper 13316, University Library of Munich, Germany, revised 09 Feb 2009.
  9. Kosec, Katrina & Wallsten, Scott, 2005. "The Economic Costs of the War in Iraq," Working paper 42, Regulation2point0.
  10. Wenzel, Lars & Wolf, André, 2013. "Protection against major catastrophes: An economic perspective," HWWI Research Papers 137, Hamburg Institute of International Economics (HWWI).

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