WORKING P A P E R The Impact of Terrorism on the Defense Industry CLAUDE BERREBI, ESTEBAN F. KLOR WR-597 July 2008 This paper series made possible by the NIA funded RAND Center for the Study of Aging (P30AG012815) and the NICHD funded RAND Population Research Center (R24HD050906). This product is part of the RAND Labor and Population working paper series. RAND working papers are intended to share researchers’ latest findings and to solicit informal peer review. They have been approved for circulation by RAND Labor and Population but have not been formally edited or peer reviewed. Unless otherwise indicated, working papers can be quoted and cited without permission of the author, provided the source is clearly referred to as a working paper. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. is a registered trademark. ! " # $ % & ' ( ) * ) ( ) % + ) % , -) . " - / %%0 ( ,) 1.2 ' -( * 1 % 3 ( 4- " * 5 6 " " - 6 - . / ' 7 "! .1 .1 . ) % 6 ) 8$ 9 : (; $00!!! (0 (0 0 ( $ ) 5 ! <" = ) 6 % 8 ) = ) >3>? $ >@88? 8A3BA C$ >@88? 38D@3 8$ - : 7 ; $00 7 0 0- 0- 3 E ) 8 ) " ' " ! C ( ( - F - /( ! ! (/ ( " ?G 8 ) (/ " " F @G 8 ) 6 - ) =+ / $ @B) *3B) +DB) ,3D " (( " " ( " ( ( " F ) ) ( ! ( !( E F " ( " - " ( " ) C F - / ! - ! E / ! F 8 F H "$ - " ) ) C 3 ) ! - ) ( ( ) ( -8 - " ( ! F 8 ! F " " ! ) 3 I I JDK (( ) ) ! " ) ! F 8 C " ) F F L 7 " ' / ) ) 8 / !( $ JK ! ! ( ) " ; JK E " ! ) " ; JK " ( ) ( ) 8 A ! (/ " ( -8 - " "8M8" " ( 2 - 5 !" ) ( (/ ) ! " (/ " ) (/ ( " F ) F ) F / ( !( ) ( 8, N ) O 1 ) O ( F N J3>>AK / J, (K " " " 3> @8 > ( JA) AK " ( "( " ) ") ( 3> @8>> - JBK ) " ) C 8 *, 6 - JBK " "" % - C ( J%K ( C ( O F 8 N ! ! " F F " " " F - J3>>AK 3> ?83> @ / , ( / ( JA) AK F ( " 3> B ( " " - B JBK ) 6 - JBK %P,? C F " C 3 ( % F ( " Q - ) ! ( " 8 !( * E JAK O ) !" ) " F ! * E JAK ) ! ( " - / - -) ! * E JAK - % / ! O " ) ! " ! C ( ( - ! F -) - 8! F % ) ! C ( N 8, N - * E JAK N O - " 8O - ! " N ! ! 7 " " N " O ( - ( H " - ? - ! ) !- ) ! F F 8 ( 8 8 *" ( E 2 ) " F ) ( (/ F ( - F F ) ! / ! C) 14% 1O C ( 1 " 3 / ! * ) ( / ! E A ( 3? 3 / R 3 S ! - *" 7 " ) ! " ! / ( Q J " K ! 8 8 8 = A / 2 ( . ) / ! " (/ D 3) 3>> T % 3) 3B ( / ) % ) ! ) " ! " 6 " ) = 3) 3>> ! ! ( 3? ) D / ) ! O ! / 3>>B83>>@ ( E / ) !( F - - ) ! 2 ( !( O $ JK U J K J K V J K J3K ) 2 / J3K ! / E -8 8 - J06K " -) J3>>AK ' ! E -8 8 - O " - J3>>AK 2 C - ! % .- " ) O 6 + ' C 8 - % .- " !( ( ? - 2 - J ) ) B - <% % 33) 3 " - ? ) ! / ( ) ! /" % .- " ' ( % , ?) !( ( ! @ K 3>>B T 3>>@ ! 2 D *" ) " ! ! % ) / " LD? L ) - " ) ) R S ! ( - ' ! ( " ) (/ @ ' O ) !" ) E 8 / - " F ( ) ! " ) " () ( ) " " " H ) ) F ! " ( " ( " ( 2 2 C ! . % , J.%,K D 2 ! J $00 - 0(0 0- 0 9 K ! 3>>B83 C .