Publications

2010
Berrebi Claude and Klor Esteban F. 7/2010. “The Impact of Terrorism on the Defence Industry.” ECONOMICA, 77, 307, Pp. 518-543. Publisher's Version Abstract

This paper analyses the impact of terrorism on Israeli companies related to the defence, security or anti-terrorism industries, relative to its impact on other companies. We match every Israeli company to the American company with the closest expected return among all the companies that belong to the same industry and trade in the same market, in order to isolate the effect of terrorism from other common industry shocks. The findings show that whereas terrorism had a significant negative impact of 5% on non-defence-related companies, it had a significantly positive overall effect of 7% on defence-related companies. Copyright (c) The London School of Economics and Political Science 2008.

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Efraim Benmelech, Claude Berrebi, and Esteban F. Klor. 4/2010. “The Economic Cost of Harboring Terrorism.” JOURNAL OF CONFLICT RESOLUTION, 54, 2, Pp. 331 - 353. Publisher's Version Abstract

The literature on conflict and terrorism has paid little attention to the economic costs of terrorism for the perpetrators. This article aims to fill that gap by examining the economic costs of harboring suicide terror attacks. Using data covering the universe of Palestinian suicide terrorists during the second Palestinian uprising, combined with data from the Palestinian Labor Force Survey, the authors identify and quantify the impact of a successful attack on unemployment and wages. They find robust evidence that terror attacks have important economic costs.The results suggest that a successful attack causes an increase of 5.3 percent in unemployment, increases the likelihood that the district's average wages fall in the quarter following an attack by more than 20.0 percent, and reduces the number of Palestinians working in Israel by 6.7 percent relative to its mean. Importantly, these effects are persistent and last for at least six months after the attack.

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2009
Steven W. Popper, Claude Berrebi, James P. Griffin, Thomas Light, Endy Y. Min, and Keith W. Crane. 12/2009. “Natural Gas and Israel’s Energy Future: Near-term Decisions from a Strategic Perspective.” RAND policy report , MG-927-YSNFF. Abstract

This PDF document was made available from www.rand.org as a public service of the RAND Corporation.

This research assesses the opportunities and risks that the government of Israel faces in shifting to an energy mix increasingly dominated by domestic and imported natural gas. The analysis seeks to help the Israeli government choose robust strategies for exploiting the use of natural gas by minimizing the potential consequences of relying more heavily on natural gas. It does this by applying newly developed methods for strategic planning and decisionmaking under deep uncertainty for these assessments. The analysis also considers broader issues related to energy in Israel.

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Steven W. Popper, James P. Griffin, Claude Berrebi, Thomas Light, and Endy Y. Min. 12/2009. “Natural Gas and Israel’s Energy Future: A Strategic Analysis Under Conditions of Deep Uncertainty.” RAND policy report, TR-747-YSNFF. Abstract

This PDF document was made available from www.rand.org as a public service of the RAND Corporation.

This study explores elements of robust strategies for exploiting the use of natural gas to minimize potential consequences from shifting to an energy mix that is increasingly dominated by domestic and imported natural gas. This report applies newly developed methods for strategic planning and decisionmaking under deep uncertainty for these assessments. The analysis also considers broader issues related to energy in Israel, and assesses the opportunities and risks that the government of Israel faces in these regards. 

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Claude Berrebi, Francisco Martorell, and Jeffery C. Tanner. 8/2009. “Qatar's labor markets at a crucial crossroad.” THE MIDDLE EAST JOURNAL, 63, 3, Pp. 421-442. Publisher's Version Abstract

With the discovery of large quantities of natural gas, the Qatari economy has experienced sustained economic growth. Similar to what has occurred in other Gulf states, a consequence of this economic boom is that the demand level for skilled and unskilled labor far outstrips that which Qatari nationals can provide. As a result, Qatar has imported foreign labor to the point where foreigners outnumber Qataris by almost seven to one. Moreover, the structure of the labor market — in particular, the system of generous and near-guaranteed public sector employment — diminishes incentives for Qataris to acquire valuable skills and to work in the private sector. The reliance on foreign laborers and the lack of skilled Qatari workers is widely seen by Qatar’s leaders as a serious threat to the nation’s economic autonomy and long-term economic viability. Thus a key challenge facing policymakers is to devise policies and reforms that will help develop a domestic workforce with the skills and incentives to work in the economy’s most important and competitive positions. Drawing on public data sources, this article provides a detailed quantitative assessment of the economic and demographic situation that underlies the current challenges and discusses several policy options that might be used to help overcome them.

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Claude Berrebi. 2009. “The Economics of Terrorism and Counterterrorism: What Matters, and is Rational-Choice Theory Helpful?” In Social Science for Counterterrorism - Paul K. Davis and Kim R. Cragin, eds., MG-849-OSD, Chp. 5: Pp. 151-208. RAND Publications. Abstract

This PDF document was made available from www.rand.org as a public service of the RAND Corporation.

What is the relationship between terrorism and such potential root causes as poverty, education, religion, and mental health? Is it useful to discuss cause-effect relationships in terms of a rational-choice model? The questions are related in the following way. First, many have sought to explain terrorism in terms of various structural factors such as those mentioned, without reference to issues of choice. In this case, the factors are thought of as preconditions; the imagery is then of the form “Because of such-and-such powerful factors, people are driven to or drawn into terrorism.” The empirical evidence has tended to disconfirm such approaches, as decisively as one finds in social science. An alternative approach is to explain terrorism as the result of what individuals and groups perceive (whether or not correctly) as rational choices. It seems clear that simple-minded rational-choice models do not work well (models such as those that limit considerations solely to monetary reward benefits and costs). However, I shall argue that more-sophisticated rationalchoice models appear to have substantial explanatory power.

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Paul K. Davis, Kim Cragin, Darcy Noricks, Todd C. Helmus, Christopher Paul, Claude Berrebi, Brian A. Jackson, Gaga Gvineria, Michael Egner, and Benjamin Bahney. 2009. Social Science for Counterterrorism: Putting the Pieces Together.. RAND Publications. Publisher's Version Abstract

This PDF document was made available from www.rand.org as a public service of the RAND Corporation. 

The authors report on an aggressively interdisciplinary project to survey and integrate the scholarly social-science literature relevant to counterterrorism. They draw on literature from numerous disciplines, both qualitative and quantitative, and then use high-level conceptual models to pull the pieces together. In their monograph, they identify points of agreement and disagreement and point out instances in which disagreements merely reflect difference of research context or perspective. Priorities for further research are suggested and improved ways to frame questions for research and analysis are identified. The questions addressed relate to how terrorism arises, why some individuals become terrorists, how terrorists generate public support, how terrorist organizations make decisions, how terrorism declines, why individuals disengage, and how strategic communications can be more or less effective.

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2008
Berrebi Claude and Klor Esteban F. 8/2008. “Are Voters Sensitive to Terrorism? Direct Evidence from the Israeli Electorate.” AMERICAN POLITICAL SCIENCE REVIEW, 102, 3, Pp. 279-301 [Lead Article]. Publisher's Version Abstract

This article relies on the variation of terror attacks time and space as an instrument to identify the causal effects of terrorism on the preferences of the Israeli electorate. We find that the occurrence of a terror attack in a given locality within three moths of the elections causes an increase of 1.35 percentage points on that locality's support for the right bloc of political parties out of the two blocs vote. This effect is of a significant political magnitude because of the high level of terrorism in Israel and the fact that its electorate is closely split between the right and left blocs. Moreover, a terror fatality has important electoral effects beyond the locality where the attack is perpetrated, and its electoral impact is stronger the closer to the elections it occurs. Interestingly, in left-leaning localities, local terror fatalities cause an increase in the support for the right bloc, whereas terror fatalities outside the locality increase the support for the left bloc of parties. Given that a relatively small number of localities suffer terror attacks, we demonstrate that terrorism does cause the ideological polarization of the electorate. Overall, our analysis provides strong empirical support for the hypothesis that the electorate shows a highly sensitive reaction to terrorism.

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Berrebi Claude, Carroll Stephen J., and Sullivan Jeffrey. 5/2008. “An Economic Model to Estimate the Profits Resulting from the Employment of Illegal Aliens.” RAND policy report , RAND Infrastructure, Safety, and Environment, TR-599-1-TEOAF. Publisher's Version Abstract

This PDF document was made available from www.rand.org as a public service of the RAND Corporation. 

The Treasury Executive Office for Asset Forfeiture (TEOAF) asked the RAND Corporation to develop an economic model that can be used by federal law enforcement officials as a tool for determining appropriate amounts of forfeiture, or payment in lieu of forfeiture, in certain cases where firms knowingly employ undocumented workers. This report presents the economic model and the analysis used to develop the model. It also documents the decision-support tool developed to implement the model.

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Angela A. Hung, Noreen Clancy, Jeff Dominitz, Eric Talley, Claude Berrebi, and Farrukh Suvankulov. 1/2008. “Investor and Industry Perspectives on Investment Advisers and Broker-Dealers.” RAND policy report, TR-556-SEC. Abstract

This PDF document was made available from www.rand.org as a public service of the RAND Corporation. 

In recent years, the evolution of the financial service industry has blurred traditional distinctions between broker-dealers and investment advisers and made it difficult to design appropriate regulatory schemes for their professional services. To better understand the industry’s dynamics and its effects on individual investors, the U.S. Securities and Exchange Commission (SEC) commissioned RAND to conduct a study of broker-dealers and investment advisers from two perspectives: first, examine investment advisers’ and broker-dealers’ practices in marketing and providing financial products and services to individual investors; and second, evaluate investors’ understanding of the differences between investment advisers’ and brokerdealers’ financial products and services, duties, and obligations.

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2007
Efraim Benmelech and Claude Berrebi. 8/2007. “Human capital and the productivity of suicide bombers.” JOURNAL OF ECONOMIC PERSPECTIVES, 21, 3, Pp. 223-238. Publisher's Version Abstract

In this paper, we study the relation between human capital of suicide bombers and the outcomes of their suicide attacks. We will provide evidence that human capital is an important factor in the production of suicide terrorism, and that more able suicide bombers are more destructive when assigned to more important targets. Our paper is related to a growing body of literature on the relation between education, poverty, and terrorism.The relationship between human capital of suicide bombers and the result of their attacks, as well as the influence of a suicide bomber's age and education on attack assignments are discussed, while considering suicide bomber's organization affiliation, age, education and overall productivity.

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Berrebi Claude and Lakdawalla Darius. 4/2007. “How Does Terrorism Risk Vary Across Space And Time? An Analysis Based On The Israeli Experience.” DEFENCE AND PEACE ECONOMICS, 18, 2, Pp. 113-131. Publisher's Version Abstract

We study the spatial and temporal determinants of terrorism risk in Israel, using a geocoded database of Israeli terrorist attacks from 1949 to 2004. In selecting targets, terrorists seem to respond rationally to costs and benefits: they are more likely to hit targets more accessible from their own homebases and international borders, closer to symbolic centers of government administration, and in more heavily Jewish areas. We also examine the waiting time between attacks experienced by localities. Long periods without an attack signal lower risk for most localities, but higher risk for important areas such as regional or national capitals.

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Berrebi Claude and Benmelech Efraim. 2/2007. “Attack Assignments in Terror Organizations and The Productivity of Suicide Bombers.” NBER, no. No. 12910. Publisher's Version Abstract

This paper studies the relation between human capital of suicide bombers and outcomes of their suicide attacks. We argue that human capital is an important factor in the production of terrorism, and that if terrorists behave rationally we should observe that more able suicide bombers are assigned to more important targets. We use a unique data set detailing the biographies of Palestinian suicide bombers, the targets they attack, and the number of people that they kill and injure to validate the theoretical predictions and estimate the returns to human capital in suicide bombing. Our empirical analysis suggests that older and more educated suicide bombers are being assigned by their terror organization to more important targets. We find that more educated and older suicide bombers are less likely to fail in their mission, and are more likely to cause increased casualties when they attack.

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Claude Berrebi. 1/2007. “Evidence about the Link Between Education, Poverty and Terrorism among Palestinians.” PEACE ECONOMICS, PEACE SCIENCE, AND PUBLIC POLICY, 13, 1, Pp. 18-53 [Lead Article]. Publisher's Version Abstract

This paper investigates the ways in which terrorism is linked to education and poverty using data newly culled from Hamas and Palestinian Islamic Jihad (PIJ) documentary sources. The paper presents a statistical analysis of the determinants of participation in terrorist activities by members of the Hamas and PIJ between the late 1980s and May 2002. The resulting evidence suggests that both higher education and standard of living are positively associated with participation in Hamas or PIJ and with becoming a suicide bomber, while being married significantly reduces the probability of participation in terrorist activities.

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2006
Berrebi Claude and Klor Esteban F. 12/2006. “On Terrorism and Electoral Outcomes: Theory and Evidence from the Israeli-Palestinian Conflict.” JOURNAL OF CONFLICT RESOLUTION, 50, 6, Pp. 899-925. Publisher's Version Abstract

This article investigates the interaction between terror attacks and electoral outcomes in Israel. The authors analyze a dynamic model of reputation that captures the salient characteristics of this conflict. The equilibrium of the theoretical model generates two precise empirical predictions about the interaction between terrorism and electoral outcomes. First, the relative support for the right-wing party is expected to increase after periods with high levels of terrorism and to decrease after periods of relative calm. Second, the expected level of terrorism is higher when the left-wing party is in office than it is during the term of the right-wing party. The authors test these hypotheses by using a newly created data set on terrorist attacks in Israel between 1990 and 2003. The first hypothesis is strongly supported by data culled from public opinion polls about the Israeli electorate’s political preferences. The second theoretical hypothesis is strongly supported by the three Israeli governments to which the theory can be applied that served during the studied time period. 

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Gery Ryan, Claude Berrebi, Megan Beckett, Allen Fremont, Stephanie Taylor, Michelle Cho, John Adams, Elaine Quiter, Harold Pincus, and Katherine Kahn. 2/2006. “Development of a Conceptual Model and Assessment of the Feasibility of a National Clinical Research Associates Program: NCRA.” RAND policy report, GS-10F-0275P. Abstract

This PDF document was made available from www.rand.org as a public service of the RAND Corporation. 

A central aim of the National Institutes of Health’s (NIH’s) Roadmap for Medical Research is to reengineer the clinical research enterprise in ways that will accelerate and optimize the research process and the translation of resulting knowledge into improved healthcare and health outcomes. A critical ingredient for the success of this effort is a substantial increase in the availability of community clinicians who are willing and able, in a time- and cost-effective manner, to enroll patients in clinical trials. To address the shortage and relative lack of diversity of providers and patients participating in clinical research, the Roadmap calls for the development of a new program, the National Clinical Research Associates (NCRA), that would attract an unprecedented number of practicing providers to the field of clinical research (Zerhouni, 2003). Unlike in many existing research programs, “Associates” would participate in clinical research in the community, where the vast majority of Americans receive their care. Not only would this group of practicing clinicians involve and support a larger and more representative set of patients in NIH-funded research studies, but the proposed NCRA infrastructure would also greatly support NIH efforts to more efficiently and effectively tailor its research studies and findings to the needs of healthcare providers and the patients they serve.

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2003

The primary goal of this paper is to investigate whether participation in terrorist activity can be linked to ignorance (measured through schooling) or to economic desperation (measured through poverty on the individual’s level and various economic indicators on the societal level) using newly culled data of Hamas and Palestinian Islamic Jihad (PIJ) terrorist cells. This paper performs a statistical analysis of the determinants of participation in Hamas and PIJ terrorist activities in Israel from the late 1980’s to the present, as well as a time series analysis of terrorist attacks in Israel with relation to economic conditions. The resulting evidence on the individual level suggests that both higher standards of living and higher levels of education are positively associated with participation in Hamas or PIJ. With regard to the societal economic condition, no sustainable link between terrorism and poverty and education could be found, which I interpret to mean that there is either no link or a very weak indirect link. Special attention is given to the suicide bomber phenomenon, and the analysis of the determinants of becoming a suicide bomber provides additional intriguing findings. In contrast with the “classic” characteristics of a suicidal individual (Hamermesh and Soss, 1974), suicide bombers tend to be of higher economic status and higher educational attainment than their counterparts in the population. Suicide bombers, however, come from lower socioeconomic groups when compared to other, non-suicidal, terrorists. 

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