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The Economics of Roadside Bombs

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Author Info

  • Matthew A. Hanson

    () (Department of Economics, College of William and Mary)

Abstract

The U.S. military has been criticized for its failure to stop the Iraqi insurgency’s use of improvised explosive devices (IEDs), which have caused most of the Coalition casualties. We use an instrumental variables approach to estimate the insurgent responses to U.S. military countermeasures. We find that the number of IED attacks (including unobserved attacks) goes up when attacks are made more costly to conduct, suggesting that IED attacks are inferior and may even be a Giffen good. A major benefit of IED countermeasures therefore comes in reducing non-IED attacks. Evaluations of the U.S. military’s $13 billion counter-IED effort have thus significantly understated its success.

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File URL: http://economics.wm.edu/wp/cwm_wp68.pdf
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Bibliographic Info

Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 68.

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Length: 22 pages
Date of creation: 11 Dec 2007
Date of revision:
Handle: RePEc:cwm:wpaper:68

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Related research

Keywords: Iraq War; Instrumental Variables; Substitution Effect; Inferior Goods; Giffen Behavior; Terrorism;

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References

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  1. Efraim Benmelech & Claude Berrebi, 2007. "Attack Assignments in Terror Organizations and The Productivity of Suicide Bombers," NBER Working Papers 12910, National Bureau of Economic Research, Inc.
  2. Battalio, Raymond C & Kagel, John H & Kogut, Carl A, 1991. "Experimental Confirmation of the Existence of a Giffen Good," American Economic Review, American Economic Association, vol. 81(4), pages 961-70, September.
  3. David A. Jaeger & M. Daniele Paserman, 2005. "Israel, the Palestinian Factions, and the Cycle of Violence," Working Papers 23, Department of Economics, College of William and Mary.
  4. Robert T. Jensen & Nolan H. Miller, 2007. "Giffen Behavior: Theory and Evidence," NBER Working Papers 13243, National Bureau of Economic Research, Inc.
  5. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-36, July.
  6. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June.
  7. Hoy, Michael & Robson, Arthur J., 1981. "Insurance as a Giffen good," Economics Letters, Elsevier, vol. 8(1), pages 47-51.
  8. Jensen, Robert & Miller, Nolan, 2007. "Giffen Behavior: Theory and Evidence," Working Paper Series rwp07-030, Harvard University, John F. Kennedy School of Government.
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Cited by:
  1. Radha Iyengar & Jonathan Monten & Matthew Hanson, 2011. "Building Peace: The Impact of Aid on the Labor Market for Insurgents," NBER Working Papers 17297, National Bureau of Economic Research, Inc.
  2. Blattman, Christopher & Miguel, Edward, 2009. "Civil War," Center for International and Development Economics Research, Working Paper Series qt90n356hs, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
  3. Christopher Blattman & Edward Miguel, 2009. "Civil War: A Review of Fifty Years of Research," Working Papers id:2231, eSocialSciences.

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