Economics of Terrorism and Counter-Terrorism Measures

This textbook presents a systematic study of terrorism from the standpoint of economic analysis. Choosing the kind and level of measures to counter terror is, to a large extent, an economic decision, as counterterrorism (CT) measures and their side effects are costly. This text, contains theoretical models that illustrate the economic mechanisms of different types of CT measures. A vast array of empirical studies and regularities are also presented. Some chapters discuss in depth the empirical results in the literature as well as the underlying statistical/econometric methodologies that go beyond ordinary regression. General Appendix A provides an exposition of the concept of compensating surplus and elements of the basic game theory, to help the reader with an economics background recapitulate micro theory concepts used in the book. General Appendix B lays out the notions of hypothesis testing, regression and more advanced statistical/econometric methods, so that the reader understands or at least can have an intuitive idea of how the results are derived and what they mean with some degree of inner comfort. Aimed at students at the intermediate undergraduate and graduate levels, the text requires knowledge of basic micro, first-order conditions of profit or utility maximization and cost minimization, and statistical concepts of hypothesis testing and regression. This textbook is intended for use in courses in economics, political science, criminal justice, and emergency management. Additionally, professionals working with national security in government and non-governmental organizations may find it useful.