Is Terrorism Eroding Agglomeration Economies in Central Business Districts? Lessons from the Office Real Estate Market in Downtown Chicago
By Alberto Abadie, Sofia Dermisi. 2008
162 citations recorded by the source corpus.
The attacks of September 11, 2001, and more recently the Madrid and London downtown train bombings, have raised concerns over both the safety of downtowns and the continuous efforts by terrorists to attack areas of such high density and significance. This article employs building-level data on vacancy rates to investigate the impact of an increased perception of terrorist risk after 9/11 on the office real estate market in downtown Chicago. Chicago provides the perfect laboratory to investigate the effects of an increase in the perceived level of terrorist risk in a major financial district. Unlike in New York, the 9/11 attacks did not restrict directly the available office space in downtown Chicago. Moreover, the 9/11 attacks induced a large increase in the perception of terrorist risk in the Chicago Central Business District, which includes the tallest building in the U.S. (the Sears Tower) and other landmark buildings which are potential targets of large-scale terrorist attacks. Our results show that, following the 9/11 attacks, vacancy rates experienced a much more pronounced increase in the three most distinctive Chicago landmark buildings (the Sears Tower, the Aon Center and the Hancock Center) and their vicinities than in other areas of the city of Chicago. Our results suggest that economic activity in Central Business Districts can be greatly affected by changes in the perceived level of terrorism.
Subfields: Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/6bb67015d4506566dccd5194cbd0df8f712230e9
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In Sociology and Political Science
Citations in the corpus
- Econometric Methods for Program Evaluation (2018, methodology): “The synthetic control estimator of Abadie and Gardeazabal (2003) and Abadie et al. (2010, 2015) provides a data driven procedure to create a comparison unit in comparative case studies.”
- Once bitten twice shy? Experience managing violent conflict risk and MNC subsidiary-level investment and expansion (2017, background): “Additionally, scholars are increasingly demonstrating that the immediate impact of a violent conflict may be a small part of the overall cost to a country (Abadie and Dermisi, 2008).”