The Gulf Oil Spill and Economic Impacts: Extending the National Interstate Economic Model (NIEMO) to Account for Induced Impacts

Park JiYoung (), Moore II James E. and Richardson Harry W.
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Park JiYoung: Department of Urban and Regional Planning, University at Buffalo, The State University of New York, Buffalo, New York, USA
Moore II James E.: University of Southern California, Industrial and Systems Engineering, Los Angeles, CA, USA
Richardson Harry W.: University of Southern California, Price School of Public Policy, Los Angeles, CA, USA

Journal of Homeland Security and Emergency Management, 2013, vol. 10, issue 1, 231-244

Abstract: There has been considerable controversy about the economic impacts of the federal Gulf deepwater oil drilling suspensions following the oil spill. In this study, we elaborate and apply the National Interstate Economic Model (NIEMO) to estimate direct, indirect and induced economic losses in each of the 50 states (and the District of Columbia). We simulate the effects of three separate, 6-month direct loss scenarios of media guestimates reported by several local sources. While the traditional NIEMO application only captured direct and indirect impacts, we developed a new module to estimate local induced impacts as well. This methodology could be applied to any similar scenario. Our model extension and application suggest a useful approach to tasks such as the one assigned to Gulf Coast Claims Facility administrator Kenneth Feinberg. The terror threat, as well as the possibility of other mishaps and natural disasters, suggests that this is always a serious possibility that these sorts of calculations will have to be made. Our innovation was to estimate the Type-II effects in the impacted states and to trace their trade effects through the NIEMO system with only minor methodological elaborations.

Keywords: Gulf oil spill; National Interstate Economic Model (NIEMO); economic impact analysis; induced impacts (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1515/jhsem-2012-0075

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