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The chapter provides a methodology for measuring the cost-effectiveness of resilience to disasters. Whereas the vast majority of extant literature in the resilience field focuses on regional and community resilience, this work extends prior work by the authors on microeconomic (that is, firm-level) resilience and its measurement. Firm-level resilience actions, or tactics, are identified and described within an established economic resilience framework. A survey-based approach is presented with an explicit application to businesses impacted by Superstorm Sandy in the New York and New Jersey coastal areas. A small sample demonstration of resilience cost-effectiveness results is presented in the form of statistical cost curves. The chapter concludes with a discussion of both methodological and public policy applications of the approach.

Benefit–Cost Analyses for Security Policies describes how to undertake the evaluation of security policies within the framework of benefit–cost analysis and offers a unique contribution to analysis of homeland security regulations in the United States. The authors outline how established procedures for benefit–cost analysis must adapt to meet challenges posed by current security policy, through examining specific security related regulations. The logic of risk assessment, selection of a discount rate, valuation of travellers’ time when delayed due to screening, valuation of changes in risks of injury or death, and impacts of terrorist events on the economy as a whole are among the issues discussed. An outline of the research and policy evaluation steps needed to build robust benefit-cost methods to evaluate security related regulations in the future is presented in the book.

This chapter summarized the current capabilities of computable general equilibrium (CGE) models that were designed to analyze and estimate the economic impacts of a terrorist attack. The CGE approach is a formidable one because it performs well in terms of nearly all of the modeling considerations applicable to the task and it superior to its major modeling competitors in most aspects. CGE is especially adept at modeling two major aspects of the economic losses in this context – resilience and general equilibrium effects. It should be noted that the formulation and application of most CGE models to date has been in respect of the economic impacts of disruptions to individual utility lifelines. Additional refinements are necessary to model the ramifications of more complex cases with widespread devastation of property from bombs or natural hazards. In should be emphasized that in these cases, the sum of the indirect damage stemming from simultaneous damage to several individual targets is greater than the actual damage because of redundancy, that is, one must avoid counting lost production in a factory from both its own destruction and its inability to produce. Most terrorist attacks however are likely to be relatively more targeted, in which cases further adjustments are not needed. Future research on CGE modeling of terrorism should focus on important aspects of the issue, as well as limitations of CGE modeling in addressing them. The combination includes improving the ability of CGE models to incorporate financial variables, technological change and cumulative adaptive behavior, short-term adjustments to equilibrium and long-term effects on economic growth.