IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Calculating Tragedy: Assessing the Costs of Terrorism

  • Bruno S. Frey
  • Simon Luechinger
  • Alois Stutzer

The trends and consequences of terrorist activities are often captured by counting the number of incidents and casualties. More recently, the effects of terrorist acts on various aspects of the economy have been analyzed. These costs are surveyed and put in perspective. As economic consequences are only a part of the overall costs of terrorism, possible approaches for estimating the utility losses of the people affected are discussed. Results using the life satisfaction approach, in which individual utility is approximated by self-reported subjective well-being, suggest that people?s utility losses may far exceed the purely economic consequences.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.crema-research.ch/papers/2004-23.pdf
File Function: Full Text
Download Restriction: no

File URL: http://www.crema-research.ch/abstracts/2004-23.htm
File Function: Abstract
Download Restriction: no

Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2004-23.

as
in new window

Length:
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:cra:wpaper:2004-23
Contact details of provider: Postal: Gellerstrasse 24, 4052 Basel
Web page: http://www.crema-research.ch
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Martin Eichenbaum & Jonas Fisher, 2004. "Fiscal Policy in the Aftermath of 9/11," NBER Working Papers 10430, National Bureau of Economic Research, Inc.
  2. Bruno S. Frey & Simon Luechinger & Alois Stutzer, 2004. "Valuing Public Goods: The Life Satisfaction Approach," CREMA Working Paper Series 2004-11, Center for Research in Economics, Management and the Arts (CREMA).
  3. 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.
  4. S. Brock Blomberg & Gregory D. Hess & Athanasios Orphanides, 2004. "The Macroeconomic Consequences of Terrorism," CESifo Working Paper Series 1151, CESifo Group Munich.
  5. Igor Evstigneev & Thorsten Hens & Klaus Schenk-Hoppé, 2006. "Evolutionary stable stock markets," Economic Theory, Springer, vol. 27(2), pages 449-468, January.
  6. Roubini, Nouriel & Swagel, Phillip & Ozler, Sule & Alesina, Alberto, 1996. "Political Instability and Economic Growth," Scholarly Articles 4553024, Harvard University Department of Economics.
  7. Hess, Gregory D & Orphanides, Athanasios, 1995. "War Politics: An Economic, Rational-Voter Framework," American Economic Review, American Economic Association, vol. 85(4), pages 828-46, September.
  8. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  9. Haim Levy & Enrico De Giorgi & Thorsten Hens, . "Two Paradigms and Nobel Prizes in Economics: A Contradiction or Coexistence?," IEW - Working Papers 161, Institute for Empirical Research in Economics - University of Zurich.
  10. Steffen Huck & Michael Kosfeld, . "The Dynamics of Neighbourhood Watch and Norm Enforcement," IEW - Working Papers 199, Institute for Empirical Research in Economics - University of Zurich.
  11. Enders, Walter & Sandler, Todd & Parise, Gerald F, 1992. "An Econometric Analysis of the Impact of Terrorism on Tourism," Kyklos, Wiley Blackwell, vol. 45(4), pages 531-54.
  12. Sandler, Todd & Enders, Walter, 2004. "An economic perspective on transnational terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 301-316, June.
  13. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
  14. repec:hal:cesptp:halshs-00179827 is not listed on IDEAS
  15. Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 20(2), pages 423-433, June.
  16. Chen, Andrew H. & Siems, Thomas F., 2004. "The effects of terrorism on global capital markets," European Journal of Political Economy, Elsevier, vol. 20(2), pages 349-366, June.
  17. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
  18. Aleksander Berentsen & Yvan Lengwiler, . "Fraudulent Accounting and Other Doping Games," IEW - Working Papers 175, Institute for Empirical Research in Economics - University of Zurich.
  19. Christian Ewerhart & Nuno Cassola & Steen Ejerskov & Natacha Valla, 2009. "Optimal allotment policy in central bank open market operations," The European Journal of Finance, Taylor & Francis Journals, vol. 15(4), pages 405-420.
  20. Fehr, Ernst & Schmidt, Klaus M., 2004. "The Role of Equality, Efficiency, and Rawlsian Motives in Social Preferences: A Reply to Engelmann and Strobel," Munich Reprints in Economics 20655, University of Munich, Department of Economics.
  21. Oechslin, Manuel & Reto Foellmi, 2003. "Who Gains from Non-Collusive Corruption?," Royal Economic Society Annual Conference 2003 159, Royal Economic Society.
  22. Haim Levy & Enrico De Giorgi & Thorsten Hens, . "Prospect Theory and the CAPM: A contradiction or coexistence?," IEW - Working Papers 157, Institute for Empirical Research in Economics - University of Zurich.
  23. Richard Carson & Robert Mitchell & Michael Hanemann & Raymond Kopp & Stanley Presser & Paul Ruud, 2003. "Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez Oil Spill," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(3), pages 257-286, July.
  24. Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
  25. Bernard M.S. van Praag & B.E. Baarsma, 2004. "Using Happiness Surveys to value Intangibles; the Case of Airport Noise," Tinbergen Institute Discussion Papers 04-024/3, Tinbergen Institute.
  26. Garfinkel, M.R., 1992. ""Domestic Politics and International Conflict"," Papers 90-92-30, California Irvine - School of Social Sciences.
  27. Falk, Armin & Ichino, Andrea, 2003. "Clean Evidence on Peer Pressure," CEPR Discussion Papers 3834, C.E.P.R. Discussion Papers.
  28. Aleksander Berentsen, . "Time-Consistent Private Supplie of Outside Paper Money," IEW - Working Papers 156, Institute for Empirical Research in Economics - University of Zurich.
  29. Falk, Armin & Kosfeld, Michael, 2003. "It's All About Connections: Evidence on Network Formation," CEPR Discussion Papers 3970, C.E.P.R. Discussion Papers.
  30. Collier, Paul & Hoeffler, Anke, 2000. "Greed and grievance in civil war," Policy Research Working Paper Series 2355, The World Bank.
  31. Berentsen Aleksander & Rocheteau Guillaume, 2003. "On the Friedman Rule in Search Models with Divisible Money," The B.E. Journal of Macroeconomics, De Gruyter, vol. 3(1), pages 1-21, December.
  32. Viscusi, W Kip & Zeckhauser, Richard J, 2003. " Sacrificing Civil Liberties to Reduce Terrorism Risks," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 99-120, March-May.
  33. Fehr, Ernst & Fischbacher, Urs & Schupp, Jürgen & von Rosenbladt, Bernhard & Wagner, Gert Georg, 2003. "A Nationwide Laboratory Examining Trust and Trustworthiness by Integrating Behavioural Experiments into Representative Surveys," CEPR Discussion Papers 3858, C.E.P.R. Discussion Papers.
  34. Aleksander Berentsen & Esther Brügger & Simon Lörtscher, . "On Cheating and Whistle-Blowing," IEW - Working Papers 153, Institute for Empirical Research in Economics - University of Zurich.
  35. Gupta, Sanjeev & Clements, Benedict & Bhattacharya, Rina & Chakravarti, Shamit, 2004. "Fiscal consequences of armed conflict and terrorism in low- and middle-income countries," European Journal of Political Economy, Elsevier, vol. 20(2), pages 403-421, June.
  36. Aleksander Berentsen & Guillaume Rocheteau & Shouyong Shi, 2007. "Friedman Meets Hosios: Efficiency in Search Models of Money," Economic Journal, Royal Economic Society, vol. 117(516), pages 174-195, 01.
  37. Ernst Fehr & Joseph Henrich, 2003. "Is Strong Reciprocity a Maladaptation? On the Evolutionary Foundations of Human Altruism," CESifo Working Paper Series 859, CESifo Group Munich.
  38. Fehr, Ernst & Tyran, Jean-Robert, 2004. "Money Illusion and Coordination Failure," IZA Discussion Papers 1013, Institute for the Study of Labor (IZA).
  39. Welsch, Heinz, 2002. "Preferences over Prosperity and Pollution: Environmental Valuation Based on Happiness Surveys," Kyklos, Wiley Blackwell, vol. 55(4), pages 473-94.
  40. Cummins, J David & Lewis, Christopher M, 2003. " Catastrophic Events, Parameter Uncertainty and the Breakdown of Implicit Long-Term Contracting: The Case of Terrorism Insurance," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 153-78, March-May.
  41. Christian Ewerhart & Philipp Wichardt, . "Signaling, Globality, and the Intuitive Criterion," IEW - Working Papers 189, Institute for Empirical Research in Economics - University of Zurich.
  42. Harumi Ito & Darin Lee, 2003. "Assessing the Impact of the September 11 Terrorist Attacks on U.S. Airline Demand," Working Papers 2003-16, Brown University, Department of Economics.
  43. Hens, Thorsten & Mayer, Janós & Pilgrim, Beate, 2004. "Existence of Sunspot Equilibria and Uniqueness of Spot Market Equilibria: The Case of Intrinsically Complete Markets," Discussion Papers 2004/15, Department of Business and Management Science, Norwegian School of Economics.
  44. David Fielding, 2000. "Counting the Cost of the Intifada: Consumption,Saving and Political Instability in Israel," Discussion Papers in Economics 00/8, Department of Economics, University of Leicester.
  45. Bruno Frey & Alois Stutzer, 2005. "Happiness Research: State and Prospects," Review of Social Economy, Taylor & Francis Journals, vol. 63(2), pages 207-228.
  46. Sunstein, Cass R, 2003. " Terrorism and Probability Neglect," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 121-36, March-May.
  47. Edward L. Glaeser & Jesse M. Shapiro, 2001. "Cities and Warfare: The Impact of Terrorism on Urban Form," Harvard Institute of Economic Research Working Papers 1942, Harvard - Institute of Economic Research.
  48. Drakos, Konstantinos, 2004. "Terrorism-induced structural shifts in financial risk: airline stocks in the aftermath of the September 11th terror attacks," European Journal of Political Economy, Elsevier, vol. 20(2), pages 435-446, June.
  49. Lee, Dwight R, 1988. "Free Riding and Paid Riding in the Fight against Terrorism," American Economic Review, American Economic Association, vol. 78(2), pages 22-26, May.
  50. David Fielding, 2003. "Modelling Political Instability and Economic Performance: Israeli Investment during the "Intifada"," Economica, London School of Economics and Political Science, vol. 70(277), pages 159-186, February.
  51. Sandler, Todd & Lapan, Harvey E., 1988. "The Calculus of Dissent: An Analysis of Terrorists' Choice of Targets," Staff General Research Papers 10818, Iowa State University, Department of Economics.
  52. Kenneth Y. Chay & Michael Greenstone, 1998. "Does Air Quality Matter? Evidence from the Housing Market," NBER Working Papers 6826, National Bureau of Economic Research, Inc.
  53. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  54. Gregory D. Hess, 2002. "The Economic Welfare Cost of Conflict: An Empirical Assessment," Claremont Colleges Working Papers 2002-08, Claremont Colleges.
  55. Aliza Fleischer & Steven Buccola, 2002. "War, terror, and the tourism market in Israel," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1335-1343.
  56. Alan B. Krueger & Jitka Maleckova, 2003. "Education, Poverty and Terrorism: Is There a Causal Connection?," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 119-144, Fall.
  57. Bruno S. Frey & Margit Osterloh, 2004. "Yes, Managers Should Be Paid Like Bureaucrats," CREMA Working Paper Series 2005-03, Center for Research in Economics, Management and the Arts (CREMA).
  58. Eckstein, Zvi & Tsiddon, Daniel, 2004. "Macroeconomic Consequences of Terror: Theory and the Case of Israel," CEPR Discussion Papers 4427, C.E.P.R. Discussion Papers.
  59. Claude Berrebi & Esteban Klor, 2004. "On Terrorism and Electoral Outcomes: Theory and Evidence from the Israeli-Palestinian Conflict," Working Papers 859, Princeton University, Department of Economics, Industrial Relations Section..
  60. Garfinkel, Michelle R, 1990. "Arming as a Strategic Investment in a Cooperative Equilibrium," American Economic Review, American Economic Association, vol. 80(1), pages 50-68, March.
  61. Eldor, Rafi & Melnick, Rafi, 2004. "Financial markets and terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 367-386, June.
  62. Paul R. Portney, 1994. "The Contingent Valuation Debate: Why Economists Should Care," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 3-17, Fall.
  63. De Giorgi, Enrico, 2008. "Evolutionary portfolio selection with liquidity shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 32(4), pages 1088-1119, April.
  64. Bernard M.S. van Praag & B.E. Baarsma, 2004. "Using Happiness Surveys to value Intangibles; the Case of Airport Noise," Tinbergen Institute Discussion Papers 04-024/3, Tinbergen Institute.
  65. David Wildasin, 2001. "Local Public Finance in the Aftermath of September 11," Public Economics 0112005, EconWPA.
  66. Brown, Jeffrey R. & Cummins, J. David & Lewis, Christopher M. & Wei, Ran, 2004. "An empirical analysis of the economic impact of federal terrorism reinsurance," Journal of Monetary Economics, Elsevier, vol. 51(5), pages 861-898, July.
  67. Enders, Walter & Sandler, Todd, 1995. "Terrorism: Theory and applications," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 9, pages 213-249 Elsevier.
  68. Bruno Frey, 2005. "‘‘Just forget it.’’ Memory distortions as bounded rationality," Mind and Society: Cognitive Studies in Economics and Social Sciences, Fondazione Rosselli, vol. 4(1), pages 13-25, 06.
  69. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  70. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
  71. Michael Kosfeld, . "Network Experiments," IEW - Working Papers 152, Institute for Empirical Research in Economics - University of Zurich.
  72. Mills, Edwin S., 2002. "Terrorism and U.S. Real Estate," Journal of Urban Economics, Elsevier, vol. 51(2), pages 198-204, March.
  73. Robert J. Shiller, 2003. "From Efficient Markets Theory to Behavioral Finance," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 83-104, Winter.
  74. Ewerhart, Christian & Cassola, Nuno & Ejerskov, Steen & Valla, Natacha, 2004. "Liquidity, information, and the overnight rate," Working Paper Series 0378, European Central Bank.
  75. Ernst Fehr & Urs Fischbacher & Bernhard von Rosenbladt & Jürgen Schupp & Gert G. Wagner, 2003. "A Nation-Wide Laboratory. Examining Trust and Trustworthiness by Integrating Behavioral Experiments into Representative Survey," CESifo Working Paper Series 866, CESifo Group Munich.
  76. Im, Eric Iksoon & Cauley, Jon & Sandler, Todd, 1987. "Cycles and Substitutions in Terrorist Activities: A Spectral Approach," Kyklos, Wiley Blackwell, vol. 40(2), pages 238-55.
  77. Blomberg, S. Brock & Hess, Gregory D. & Weerapana, Akila, 2004. "Economic conditions and terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 463-478, June.
  78. 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.
  79. van Praag, Bernard M. S. & Baarsma, Barbara E., 2004. "Using Happiness Surveys to Value Intangibles: The Case of Airport Noise," IZA Discussion Papers 1096, Institute for the Study of Labor (IZA).
  80. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
  81. Armin Falk & Michael Kosfeld, . "The Hidden Costs of Control," IEW - Working Papers 250, Institute for Empirical Research in Economics - University of Zurich.
  82. Reto Foellmi & Josef Zweimueller, . "Inequality, Market Power, and Product Diversity," IEW - Working Papers 145, Institute for Empirical Research in Economics - University of Zurich.
  83. Bruno S. Frey & Alois Stutzer, 2003. "Direct Democracy: Designing a Living Constitution," CREMA Working Paper Series 2003-05, Center for Research in Economics, Management and the Arts (CREMA).
  84. Howard Kunreuther & Erwann Michel-Kerjan & Beverly Porter, 2003. "Assessing, Managing, and Financing Extreme Events: Dealing with Terrorism," NBER Working Papers 10179, National Bureau of Economic Research, Inc.
  85. repec:spo:wpecon:info:hdl:2441/9286 is not listed on IDEAS
  86. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March.
  87. Alesina, Alberto, et al, 1996. " Political Instability and Economic Growth," Journal of Economic Growth, Springer, vol. 1(2), pages 189-211, June.
  88. Enders, Walter & Sandler, Todd, 1996. "Terrorism and Foreign Direct Investment in Spain and Greece," Kyklos, Wiley Blackwell, vol. 49(3), pages 331-52.
  89. Drakos, Konstantinos & Kutan, Ali M., 2001. "Regional effects of terrorism on tourism: Evidence from three Mediterranean countries," ZEI Working Papers B 26-2001, ZEI - Center for European Integration Studies, University of Bonn.
  90. Glaser, Markus & Nöth, Markus & Weber, Martin, 2003. "Behavioral Finance," Sonderforschungsbereich 504 Publications 03-14, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  91. Frey, Bruno S. & Luechinger, Simon, 2004. "Decentralization as a disincentive for terror," European Journal of Political Economy, Elsevier, vol. 20(2), pages 509-515, June.
  92. Bruno S. Frey & Simon Luechinger, . "How to Fight Terrorism: Alternatives to Deterrence," IEW - Working Papers 137, Institute for Empirical Research in Economics - University of Zurich.
  93. Hess, Gregory D. & Orphanides, Athanasios, 2001. "Economic conditions, elections, and the magnitude of foreign conflicts," Journal of Public Economics, Elsevier, vol. 80(1), pages 121-140, April.
  94. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
  95. Aleksander Berentsen & Esther Bruegger & Simon Loertscher, . "Heterogeneity, Local Information, and Global Interaction," IEW - Working Papers 182, Institute for Empirical Research in Economics - University of Zurich.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cra:wpaper:2004-23. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna-Lea Werlen)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.