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

  • The Key to Wellbeing in the Office

    A few years ago, all we saw in the news was the ‘great resignation.’ Now we have another ‘great’ to deal with. According to CBRE, 2023 was the start of the ‘great return’ as office workers returned to their normal offices after working from home. The data shows that two-thirds of all U.S office buildings were more than 90% leased as of Q2 2023. Read Now

  • Failed Cybersecurity Controls Costing U.S. Businesses $30 Billion Yearly

    Panaseer recently released ControlWatch and the Continuous Controls Battle: Panaseer 2025 Security Leaders Report examining the cost of cybersecurity control failures and the impact of growing personal liability for security failings on security leaders. The report analyzes the findings of a survey of 400 security decision makers (SDMs) across the US and UK. It shows that security leaders feel under increasing pressure to provide assurances around cybersecurity, exposing them to greater personal risk – yet many lack the data and resources to accurately report and close cybersecurity gaps. Read Now

  • The Business Case for Video Analytics: Understanding the Real ROI

    For security professionals who may be hesitant to invest in video analytics, now's the time to reconsider. In a newly released Omdia report commissioned by BriefCam (now Milestone Systems), the research firm uncovered a compelling story: more than 85% of North American and European organizations that use video analytics achieve a return on investment within just one year. The study, which surveyed 140 end users across multiple industries, demonstrates that security technology is no longer just for security — it's a cross-organizational tool that delivers measurable business value far beyond traditional safety applications. Read Now

  • Survey: 54% of Organizations Cite Technical Debt as Top Hurdle to Identity System Modernization

    Modernizing identity systems is proving difficult for organizations due to two key challenges: decades of accumulated Identity and Access Management (IAM) technical debt and the complexity of managing access across multiple identity providers (IDPs). These findings come from the new Strata Identity-commissioned report, State of Multi-Cloud Identity: Insights and Trends for 2025. The report, based on survey data from the Cloud Security Alliance (CSA), highlights trends and challenges in securing cloud environments. The CSA is the world’s leading organization dedicated to defining standards, certifications, and best practices to help ensure a secure cloud computing environment. Read Now

Featured Cybersecurity

Webinars

New Products

  • 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. 3

  • Automatic Systems V07

    Automatic Systems V07

    Automatic Systems, an industry-leading manufacturer of pedestrian and vehicle secure entrance control access systems, is pleased to announce the release of its groundbreaking V07 software. The V07 software update is designed specifically to address cybersecurity concerns and will ensure the integrity and confidentiality of Automatic Systems applications. With the new V07 software, updates will be delivered by means of an encrypted file. 3

  • PE80 Series

    PE80 Series by SARGENT / ED4000/PED5000 Series by Corbin Russwin

    ASSA ABLOY, a global leader in access solutions, has announced the launch of two next generation exit devices from long-standing leaders in the premium exit device market: the PE80 Series by SARGENT and the PED4000/PED5000 Series by Corbin Russwin. These new exit devices boast industry-first features that are specifically designed to provide enhanced safety, security and convenience, setting new standards for exit solutions. The SARGENT PE80 and Corbin Russwin PED4000/PED5000 Series exit devices are engineered to meet the ever-evolving needs of modern buildings. Featuring the high strength, security and durability that ASSA ABLOY is known for, the new exit devices deliver several innovative, industry-first features in addition to elegant design finishes for every opening. 3