Economic Analysis

The economics theme area is focused on estimating consequences and costs of terrorism and natural hazards, as well as evaluating investment decisions in mitigation and resilience to reduce these risks.  These issues occur both at the level of an individual organization’s operational decisions and economy-wide through sectoral interdependencies.

CREATE uses economics to develop techniques and metrics used for their analyses.  Terrorist acts can have extensive negative consequences, beginning with death and injury, property damage, and ordinary direct business interruption.  However, negative impacts can be magnified greatly by a combination of ordinary multiplier or general equilibrium effects, cascading infrastructure system failures, and behavioral responses stemming from fear.  At the same time, extensive resilience exists or can be enhanced at all levels--individual households and businesses, markets, supply chains, and the economies of regions and the nation as a whole.  CREATE researchers empirically estimate consequences and risk reduction implementation costs at an appropriate level, often categorized as microeconomic or macroeconomic.  At the microeconomic level, methods common to partial equilibrium benefit-cost analysis are frequently refined and used. At the macroeconomic level, computable general equilibrium and input-output models are typically refined and used. 

CREATE researchers have developed a comprehensive economic consequence analysis framework used primarily for macroeconomic evaluation of risk-based outcomes, while also utilizing a risk-informed social benefit-cost framework.  The frameworks have been applied to numerous macro and micro issues, such as sectoral terrorism risk assessments (e.g., cyber, ports, utilities), and to a wide range of threat categories (natural hazards, terrorist attacks, technological accidents)and to numerous case studies of operational changes within businesses, infrastructure service providers and DHS components. (e.g., cost-effectiveness of individual resilience tactics, border-crossing wait times reductions, terrorism countermeasure spillover effects on the business environment).

Researchers

Dr. Adam Rose is a Research Professor in the University of Southern California Sol Price School of Public Policy and a Research Fellow at CREATE. Previously, he held faculty and department chair positions in applied economics departments at The Pennsylvania State University and West Virginia University, as well as a faculty positon in economics at the University of California, Riverside. He received his PhD in economics from Cornell University, but has worked on interdisciplinary topics throughout most of his career. Read More.       

 

Dr. Scott Farrow is a Professor in the Department of Economics at UMBC, a branch of the University of Maryland and a Research Fellow at CREATE. Previously Dr. Farrow was the Chief Economist of the US GAO (Government Accountability Office) where he led a group focused on Government wide risk management. Read More.

                                                                                                                                                                                                                                                                                                                                                             

Dr. Dan Wei is Research Associate Professor in the USC Sol Price School of Public Policy, and a Research Fellow at CREATE. She has been active in research in economic impact modeling, the economics of natural disaster and terrorism, and energy and environmental policy.  Read More.

                                                                                                                                                                                                                                                                                                                                                                          

Dr. Jonathan Eyer is Research Assistant Professor in the USC Sol Price School of Public Policy, and a Research Fellow at CREATE. He received his Ph.D. in economics from North Carolina State University in 2015. His research interests lay at the intersection of energy and environmental economics, particularly with respect to climate change. Read More.

                                                                                                                                                     

Sample Publications

      

Sample Papers