MEASURING AND UNDERSTANDING THE IMPACT OF TERRORISM

ANNEX E
ECONOMIC COSTS OF TERRORISM METHODOLOGY
The costs of terrorism are calculated using data from the Global Terrorism Database
(GTD), which is collated by the National Consortium of the Study of Terrorism and
Responses to Terrorism (START). The model takes into account the direct and indirect
costs associated with death and injury, as well as the direct costs from property
damage and kidnapping.
While the value of property damage is taken from the START
database, the losses due to death and injury are calculated using
IEPs costs from homicide (death) and assault (injury). The costs
of homicides and assault are taken from McCollister (2010) as
the cost of violent injury or death. This is then scaled to an
individual country’s GDP per capita (GDP PPP) relative to the
source of the estimate. The relative cost is then multiplied by
the total number of deaths or injuries caused by terrorism for
each country.
FIGURE 44 ESTIMATED COSTS FROM AN
ATTACK IN LEBANON ON 19 FEBRUARY 2014
The major components of the costs from this
attack were associated with the fatalities.
This is consistent with the total economic
costs of terrorism.
The cost of property damage is taken from the average cost of
an attack as shown in the START database. The START
database contains the size of the attack and the type of attack,
shown by the eight columns in table 14. As data is missing for
some attacks, IEP takes the average cost for each category and
applies it as a set unit cost.
Injuries
Property
damage
An example of the costing methodology can be shown using an
incident which occurred in Beirut, Lebanon on 19, February
2014. A minor bombing occurred in Beirut targeting private
citizens. A total of seven people were killed and 64 wounded.
According to IEPs estimations, the total economic cost of the
event accumulated to US$27,812,477. This was comprised of
$24,342,254 due to death (88 per cent), $3,067,860 due to injury
(11 per cent) and $402,333 from property damage (1 per cent).
Deaths
Source: IEP calculations
GLOBAL TERRORISM INDEX 2015 | Annexes
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