When Bioterrorism Was No Big Deal

Patricia E. Beeson, Werner Troesken

NBER Working Paper No. 12636
Issued in October 2006
NBER Program(s):Development of the American Economy, Health Care

To better understand the potential economic repercussions of a bioterrorist attack, this paper explores the effects of several catastrophic epidemics that struck American cities between 1690 and 1880. The epidemics considered here killed between 10 and 25 percent of the urban population studied. A particular emphasis is placed on smallpox and yellow fever, both of which have been identified as potential bioterrorist agents. The central findings of the paper are threefold. First, severe localized epidemics did not disrupt, in any permanent way, the population level or long-term growth trajectory of those cities. Non-localized epidemics (i.e., those that struck more than one major city) do appear to have had some negative effect on population levels and long-term growth. There is also modest evidence that ill-advised responses to epidemics on the part of government officials might have had lasting and negative effects in a few cities. Second, severe localized epidemics did not disrupt trade flows; non-localized epidemics had adverse, though fleeting, effects on trade. Third, while severe epidemics probably imposed some modest costs on local and regional economies, these costs were very small relative to the national economy.

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Document Object Identifier (DOI): 10.3386/w12636

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