CREATE economics research program awarded $1 million in additional grants

November 7, 2013
Adam Rose

Research Professor Adam Rose
Photo by Amber Medley

By Kelly Buccola

The USC CREATE Homeland Security Center’s economic analysis research team, led by Price School of Public Policy Research Professor Adam Rose, has been awarded a number of additional federal grants totaling approximately $1 million. These include:

  • Customs and Border Patrol (CBP) Border Wait Times Phase II: $200,000
  • CBP Centers of Excellence and Expertise (CEEs): $250,000
  • Domestic Nuclear Detection Office (DNDO) Modeling the Temporal and Spatial Consequences of Nuclear and Radiological Terrorism Events: $275,000
  • National Biosurveillance Integration Center (NIBIC) Develop the Value-of-Information for Biosurveillance Project: $300,000

The two CBP projects are outgrowths of the successful project the CREATE team completed last spring that estimated the macroeconomic impacts of changes in wait times at U.S. border freight inspection and at customs and passport control stations. They found that, on average, each additional CBP agent generated $2 million of additional GDP and 33 additional jobs. These might seem as unrealistic “multipliers” but they pertain to alleviating significant bottle-necks rather than to ordinary average activity.

The first of the new CBP studies is actually Phase II of that original CBP study. This phase extends the analysis to examine more aspects of wait times at more airports, including the extent to which reduced wait times not only benefit the people already traveling, but also induce more visitors to the U.S. The team will also be examining the impacts in relation to a broad range of staffing changes.

The CBP/CEE project is groundbreaking, allowing CREATE researchers an opportunity to analyze a new governmental institution created specifically to facilitate international trade. The CEE program calls for the establishment of 12 centers, each specializing in a distinct commodity – and CREATE’s focus will be the Electronics CEE in the L.A. area. This new arrangement calls for a “single window” for processing paperwork, supervising inspections, and evaluating trade practices. This enhances specialization and should reduce “wait times” more broadly defined. A benefit-cost analysis framework will be developed that can be used by CBP to evaluate all of the new CEEs.

The DNDO project involves developing a tool to be used in-house by DHS staff for analyzing the economic consequences of nuclear and radiological attacks. DHS has developed a large number of attack scenarios and needs a rapid estimation tool. CREATE has pioneered the development of advanced economic consequence models using computable general equilibrium (CGE) analysis for this purpose; however, CGE models are expensive to construct and require specialized skills to operate. The team will be developing a pilot regression model that utilizes numerous CGE simulations of an attack under varying conditions relating to size, target, direct property damage, type of economy affected, and extent of applicable resilience, for example. This will enable DNDO staff to incorporate values of these key variables for any specific attack scenario to estimate the impacts in a matter of minutes rather than weeks.

The NBIC project involves evaluating models to estimate the costs of biological terrorism attacks, and costs of prevention and remediation, so that improved economic analyses can be performed. The team will undertake a comparative evaluation of both microeconomic modeling and macroeconomic modeling approaches and offer suggestions for improvement.

For the new CBP projects, members of the CREATE study teams include participants from the original CBP project. Among them is econometrician Bryan Roberts, who has extensive experience working with CBP data. He heads a team at the consulting firm Econometrica. CREATE’s Director of Research Isaac Maya will continue in his key role as the liaison between CREATE and CBP. Nat Heatwole, a postdoctoral research associate at CREATE, will be extending his previous work on the logistics of freight border crossings to sea and air crossings. Price Research Assistant Professor Dan Wei will be continuing her research on analyzing international trade data and on regional analysis. Postdoctoral research associate Fynn Prager, PhD ’13, will be taking the lead on the CGE analysis while working with Roberts and Rose on the development of a pioneering framework for analyzing the new CEE institution. Brett Shears, a Price MPP student, will prepare background reports and analyze various aspects of CEE operations. MPP student Katherine Lu will be handling the data management.

CREATE team members on other projects include Shilpika Lahiri, USC Price MPP student who recently completed a successful internship with Department of Homeland Security, who will be evaluating modeling approaches for the NBIC study. The Economics team will also be working with CREATE affiliate Henry Willis of RAND, USC Price Research Assistant Professor Heather Rosoff and CREATE Director Steve Hora on the assessment of the value of information for reducing bioterrorism risk.

For the DNDO study, CREATE postdoctoral research associate Sam Chatterjee will be contributing to the direct economic impact estimation along with Heatwole. Peter Dixon, a noted leader in CGE analysis, and his team in Australia will be working on developing a typology of nuclear attack scenarios, performing the CGE simulations, and collaborating on the development of the reduced-form rapid estimation tool.