RDD Attack on Los Angeles

William Burns

Fig2Comparison

RDD Attack on Los Angeles. To examine how events can lead to markedly different public reactions and subsequent ripple effects, we developed two crisis scenarios. The first scenario involved a dirty bomb (a conventional bomb mixed with radiological material) attack on the Los Angeles financial district. This hypothetical attack was patterned after one of the Department of Homeland Security’s National Planning Scenarios, which assumes 180 deaths and little property damage. Researchers also assumed a 30-day clean-up before the area could be declared safe. The second scenario involved a 6.5 magnitude earthquake located near Los Angeles. In this situation 195 people would die, and there would be some property damage. Thirty days later the affected area would also be declared safe, although rebuilding would take many months. Using a nationwide panel, we had respondents read each scenario and questioned them about their perceived risk, use of products and services, as well as their willingness to vacation and willingness to work in Los Angeles following these events. We found that the dirty bomb attack caused much more concern and more reticence to visit or do business with Los Angeles than did the earthquake. Additionally, products that might be susceptible to contamination or nonessential services that required going near the affected areas generated the most reluctance. We then imported these survey findings, along with pertinent economic data, into an economic model of Los Angeles in the case of the dirty bomb attack. We were particularly interested to discover the degree to which behavioral factors contributed to the overall economic consequences. Results suggested that for every dollar of real GDP loss attributed to business interruption, deaths and injuries, about 15 dollars of additional real GDP loss could be attributed to behavioral factors such as reduced consumption, compensating wage increases, and increased required rates of return on investment (please see Figure 2). This suggests that, in addition to effective emergency response, attention needs to be given to risk communication and the building of trust within communities in order to reduce these “fear factors.”