Researchers Study Costs of "Dirty Bomb" Attack in Los Angeles

A dirty bomb attack centered on downtown Los Angeles’ financial district could severely impact the region’s economy to the tune of nearly $16 billion, fueled primarily by psychological effects that could persist for a decade.

The study, published by a team of internationally recognized economists and decision scientists in the current issue of Risk Analysis, monetized the effects of fear and risk perception and incorporated them into a state-of-the-art macroeconomic model.

“We decided to study a terrorist attack on Los Angeles not to scare people, but to alert policymakers just how large the impact of the public’s reaction might be,” said study co-author William Burns, a research scientist at Decision Research in Eugene, Ore. “This underscores the importance of risk communication before and after a major disaster to reduce economic losses.”

Economists most often focus on the immediate economic costs of a terrorist event, such as injuries, cleanup and business closures. In this scenario, those initial costs would total just over $1 billion.

“Terrorism can have a much larger impact than first believed,” said study co-author Adam Rose, a research professor with the USC Price School of Public Policy and USC's Center for Risk and Economic Analysis of Terrorism Events (CREATE). “The economic effects of the public’s change in behavior are 15 times more costly than the immediate damage in the wake of a disaster.”

“These findings illustrate that because the costs of modern disasters are so large, even small changes in public perception and behaviors may significantly affect the economic impact,” said Rose, who has published economic estimates of the 9/11 attacks, the Northridge Earthquake and other major disasters.

To estimate how fear and risk perception ripple through the economy after a major terrorist event, the researchers surveyed 625 people nationwide after showing them a mock newspaper article and newscasts about the hypothetical dirty bomb attack to gauge the public’s reticence to return to normal life in the financial district.

The study translated these survey results into estimates of what economic premiums would be put on wages and what discounts shoppers would likely require in the aftermath of a terrorist attack.

After six months, 41 percent of those surveyed said they would still not consider shopping or dining in the financial district. And, on average, employees would demand a 25 percent increase in wages to return to their jobs.

“The stigma generated by dirty bomb radiation could generate large changes in the perceived risk of doing business in the region,” said co-author James Giesecke of the Centre of Policy Studies at Monash University. “However, with regional economies in competition with one another for customers, businesses, and employees, it takes only small changes in perceived risk to generate big losses in economic activity.”

The paper relied on one of 15 planning scenarios - the detonation of a dirty bomb in a city center -- identified by the Department of Homeland Security in an effort to focus anti-terrorism spending nationwide.

Other authors of the study are Paul Slovic with Decision Research and the University of Oregon; Anthony Barrett of ABS Consulting in Arlington, Va.; Ergin Bayrak of the USC Annenberg School for Communication and Journalism; and Michael Suher of Brown University.

This study is part of a larger special issue of the international journal Risk Analysis which showcases USC CREATE’s research on risk assessment research of terrorism events, natural disasters and their economic impacts. The special series, entitled “Risk Perception Behavior: Anticipating and Responding to Crisis,” was born from a special workshop organized by USC

CREATE to explore possible avenues of research leading to insights in risk analysis and includes 11 different studies.

The research was funded by the U.S. Department of Homeland Security through USC CREATE and the National Science Foundation.

Featured

  • Unlocking the Possibilities

    Security needs continue to evolve and end users are under pressure to address emerging risks and safety concerns. For many, that focus starts with upgrading perimeter openings and layering technologies—beginning at the door. Read Now

  • Freedom of Choice

    In today's security landscape, we are witnessing a fundamental transformation in how organizations manage digital evidence. Law enforcement agencies, campus security teams, and large facility operators face increasingly complex challenges with expanding video data, tightening budget constraints and inflexible systems that limit innovation. Read Now

  • Accelerating a Pathway

    There is a new trend touting the transformational qualities of AI’s ability to deliver actionable data and predictive analysis that in many instances, seems to be a bit of an overpromise. The reality is that very few solutions in the cyber-physical security (CPS) space live up to this high expectation with the one exception being the new generation of Physical Identity and Access Management (PIAM) software – herein recategorized as PIAM+. Read Now

  • Protecting Your Zones

    It is game day. You can feel the crowd’s energy. In the parking lot. At the gate. In the stadium. On the concourse. Fans are eager to party. Food and merchandise vendors ready themselves for the rush. Read Now

  • Street Smarts

    The ongoing acceptance of AI and advanced data analytics has allowed surveillance camera technology to shift from being a tactical tool to a strategic business solution. Combining traditional surveillance technology with AI-based data-driven insights can streamline transportation systems, enhance traffic management, improve situational awareness, optimize resource allocation and streamline emergency response procedures. Read Now

New Products

  • 4K Video Decoder

    3xLOGIC’s VH-DECODER-4K is perfect for use in organizations of all sizes in diverse vertical sectors such as retail, leisure and hospitality, education and commercial premises.

  • AC Nio

    AC Nio

    Aiphone, a leading international manufacturer of intercom, access control, and emergency communication products, has introduced the AC Nio, its access control management software, an important addition to its new line of access control solutions.

  • Camden CM-221 Series Switches

    Camden CM-221 Series Switches

    Camden Door Controls is pleased to announce that, in response to soaring customer demand, it has expanded its range of ValueWave™ no-touch switches to include a narrow (slimline) version with manual override. This override button is designed to provide additional assurance that the request to exit switch will open a door, even if the no-touch sensor fails to operate. This new slimline switch also features a heavy gauge stainless steel faceplate, a red/green illuminated light ring, and is IP65 rated, making it ideal for indoor or outdoor use as part of an automatic door or access control system. ValueWave™ no-touch switches are designed for easy installation and trouble-free service in high traffic applications. In addition to this narrow version, the CM-221 & CM-222 Series switches are available in a range of other models with single and double gang heavy-gauge stainless steel faceplates and include illuminated light rings.