National Center for Risk and Economic Analysis of Terrorism Events University of Southern California

National Center for Risk and Economic Analysis of Terrorism Events University of Southern California The Perception of Terrorist Events to Improve Risk Communication: Understanding the Impact of Near-Miss Events and Terrorist Risk Factors October 2012 to September 2013 Robin L. Dillon-Merrill McDonough School of Business rld9@georgetown.edu Gary M. Shiffman Georgetown University Center for Security Studies gms24@georgetown.edu Other Contributing Investigators: Catherine Tinsley McDonough School of Business "This research was supported by the United States Department of Homeland Security through the National Center for Risk and Economic Analysis of Terrorism Events (CREATE) under Cooperative Agreement No. 2010-ST-061-RE0001. However, any opinions, findings, and conclusions or recommendations in this document are those of the authors and do not necessarily reflect views of the United States Department of Homeland Security or the University of Southern California." Cooperative Agreement No. 2010-ST-061-RE0001 Department of Homeland Security December 31, 2013 3710 McClintock Avenue, RTH 314 ~ Los Angeles, CA 90089-2902 ~ (213) 740-5514 ~ www.usc.edu/create

ABOUT CREATE Now in its tenth year of operation, the National Center for Risk and Economic Analysis of Terrorism Events (CREATE) was the first university-based Center of Excellence (COE) funded by University Programs of the Science and Technology (S&T) Directorate of the Department of Homeland Security (DHS). CREATE started operations in March of 2004 and has since been joined by additional DHS centers. Like other COEs, CREATE contributes university-based research to make the Nation safer by taking a longer-term view of scientific innovations and breakthroughs and by developing the future intellectual leaders in homeland security. CREATE's mission is to improve our Nation's security through research and development of advanced models and tools to evaluate risks, costs and consequences of terrorism and natural and man-made hazards and to guide economically viable investments in homeland security. We are accomplishing our mission through an integrated program of research, education and outreach that is designed to inform and support decisions faced by elected officials and governmental employees at the national, state, and local levels. We are also working with private industry, both to leverage the investments being made by the Department of Homeland Security in these organizations, and to facilitate the transition of research toward meeting the security needs of our nation. CREATE employs an interdisciplinary approach merging engineers, economists, decision scientists, and system modelers in a program that integrates research, education and outreach. This approach encourages creative discovery by employing the intellectual power of the American university system to solve some of the country s most pressing problems. The Center is the lead institution where researchers from around the country come to assist in the national effort to improve homeland security through analysis and modeling of threats. The Center treats the subject of homeland security with the urgency that it deserves, with one of its key goals being producing rapid results, leveraging existing resources so that benefits accrue to our nation as quickly as possible. By the nature of the research in risk, economics, and operations, CREATE serves the need of many agencies at the DHS, including the Transportation Security Administration, Customs and Border Protection, Immigration and Customs Enforcement, FEMA and the US Coast Guard.. In addition, CREATE has developed relationships with clients in the Offices of National Protection and Programs, Intelligence and Analysis, the Domestic Nuclear Detection Office and many State and Local government agencies. CREATE faculty and students take both the long-term view of how to reduce terrorism risk through fundamental research, and the near-term view of improving the cost-effectiveness of counterterrorism policies and investments through applied research. In 2011, the University of Southern California (USC) and a team of 23 partner institutions were awarded a new 5-year Cooperative Agreement resulting from a recompetition of the Center s charter. This annual report covers the third year under Cooperative Agreement 2010-ST-061-RE0001, the ninth year overall of CREATE s DHS funding, from October 2012 to September 2013. ii

Table of Contents 1. Executive Summary... 3 2. Research Accomplishments... 4 2.1. Near-Misses, Risk Decay, and Future Disaster Preparedness... 4 2.2. Research Products... 6 2.2.1. Publications and Reports... 7 2.2.2. Presentations... 7 3. Research Transition... 8 3.1. Applied Relevance... 8 3.2. Collaborative Projects... 9 4. Education... 9 5. Outreach... 10 1. Executive Summary The primary focus of the research at Georgetown University has been to understand how people perceive terrorist events in an attempt to improve future risk communication efforts. One specific focus is on the perception of near-miss terrorism experiences, and the lasting impact of these events over time. We demonstrate that when near-misses are interpreted as disasters that did not occur and thus provide the perception that the system is resilient to the hazard, people illegitimately underestimate the danger of subsequent hazardous situations and make riskier decisions. On the other hand, if near-misses can be recognized and interpreted as disasters that almost happened and thus provide the perception that the system is vulnerable to the hazard, this will counter the basic near-miss effect and encourage mitigation (at least initially). In this research, we use these distinctions between resilient and vulnerable near-misses to examine how people come to define an event as either a resilient or vulnerable near-miss, as well as how this interpretation influences perceptions of risk and mitigation behavior. Other CREATE research following significant terrorist events has shown substantial economic impacts from such events. For example, other CREATE researchers, Gordon, Kim, Moore, Park,& Richardson (2007), found substantial reductions in air travel well after the initial 9/11 attacks and estimated that the recovery of the air transit system occurred only after 2 years. Similarly, CREATE researchers Prager, Asay, Lee, & von Winterfeldt (2011), found that passenger journeys fell on the London underground by an average of 8.3% for the 4 months following the July 2005 London attacks. This reduction represented 22.5 million less passenger journeys than would have been predicted for that period without the bombings. Their analysis also showed reduced travel until June 2006. Because of the significant impact to the economy following attacks and the fact that fortunately most attacks in the United States have been nearmiss events, a better understanding of how people perceive near-misses is an important contribution of this research. We find that if observers focus on the resilience of the near miss (in some sense, focusing on the miss instead of the near ), they are less likely to alter behaviors after an event. Additionally, this research defines a measure for assessing the perception of the near-miss event as a scale based on questions that assess To what extent was [this scenario] almost [a bad event]? and To what extent were [people] just lucky that [the bad event] did not happen? Realizing the extent to which events are recognized as vulnerable near-misses will promote Page 3 of 10

higher feelings of risk and higher intentions to change behavior are important for communicating information regarding events to the public in ways to encourage desired behaviors (e.g., do not quit flying, do not quit visiting New York City, etc.) Being able to understand and characterize the different groups interpretations of the events in terms of perceptions of the near-miss can contribute to a constructive public policy debate. Also in this research, we are able to demonstrate that the perception that a near-miss event is close to being a successful terrorist attack declines over time following the event and that this decline partially explains the decline in the perception of the risk. With multiple actual near-miss terrorism events, we are able to show that the perceived risk for terrorism in general (i.e., not for a specific attack) decays more slowly, and is reactivated by additional terrorist attempts. Finally, we are able to demonstrate the importance of reference points when evaluating near-miss events. Near-miss events are commonly ambiguous and subject to interpretation regarding how close the event was to being a disaster. We find significant difference for the same event depending on what events participants have as reference points. Each of these findings has important implications for DHS (and others responsible for communicating with the public about attempted terrorist events). Following a terrorist attack, the DHS needs to encourage the public to respond to the event in an appropriate and rational manner. Creating a rational response is critical to minimizing future economic damage from the attack. For example, in the case of a dirty bomb attack, people will need to follow advice to shelter in place for some period of time, but for the case of an isolated attack against a commercial airliner, people should not stop their flying and should continue their normal travel routines. Additionally, some level of forgetting is important in the recovery process, but vigilance and preparation are critical to preventing the next terrorist attempt from being a disastrous event. Other CREATE researchers, Michel-Kerjan et al (2012), recommend long-term flood insurance policies (e.g., 10 years or greater), so that when the initial response following a significant flooding event occurs, people are locked into policies and cannot immediately drop the insurance as the memories of the flooding disaster fade. Similar ideas could be considered in terrorism contexts. In conclusion, our contribution is in highlighting the critical role that people s interpretation of the prior experience has on their subsequent behavior and in measuring what shapes that interpretation. 2. Research Accomplishments 2.1. Near-Misses, Risk Decay, and Future Disaster Preparedness Figure 1 shows our proposed mediation model. Prior experience is an antecedent with both a direct effect to one s intention to take protective actions and an indirect effect on intention through perceived risk. Perceived risk is also an antecedent to one s intentions to take protective actions and thus perceived risk would partially mediate the relationship between prior experience and protective actions. This is consistent with past research related to disaster experience and decision making for natural hazards. Page 4 of 10

For example, several studies document the increase in protective actions (at least in the short term) following damage from a natural disaster such as seen by the interest in purchasing flood insurance which increases in an area as degree of flood damage increases. Also, when examining individual s perceptions of risk and behavioral intentions, past research shows that people who perceive a high risk of an adverse event are more likely to state intentions to take personal steps to mitigate the risk. Specifically regarding near-miss experiences, this model as proposed is consistent with our previous near-miss research that showed that perceived risk partially mediated the relationship between exposure to near-misses and risky choice where again their exposure to near-misses was a manipulated condition rather than a measured event. Figure 1 Proposed Model We tested this relationship separately for events that are recognized as more of a vulnerable nearmiss than those less recognized as a vulnerable near-miss. We examined the model separately for different types of near-miss events because of the strength of the research supporting the impact of framing in the behavioral decision making literature and the implications in decision making. We expect events that are perceived as being more of a vulnerable near-miss will invoke a more careful deliberation of the risks of future events than those less recognized as a vulnerable near-miss. Specifically, near-miss events that make the decision maker feel vulnerable (as measured by assessments of how much disaster almost happened and how much it was just luck that disaster did not happen) enhances the focus on the risk of future events and thus should promote protective behavior. On the other hand, near-miss events that focus the decision maker on the resilience of the system do not activate feelings of risk, and thus risk should have a lesser role in the decision to choose protective behaviors. We tested this model in both behavioral laboratory studies and field studies that examined perceptions of the Flight 253 attack, the Times Square attack, and the Portland Tree Lighting Ceremony attack. Figure 2 summarizes the mediation analyses for the three terrorist events. Page 5 of 10

Figure 2 Mediation Analysis The hypothesized mediating relationships are present. For the terrorist attacks on Times Square and Flight 253 (i.e., the vulnerable near-misses), perceived risk is the critical factor fully mediating the relationship between perceptions of the event and behavioral intentions. For the attack on the Portland ceremony (i.e., the resilient near-miss terrorist did not even have a real bomb), perceived risk is less activated and does not mediate the relationship between perceptions of the event and behavioral intentions. In this research, we also asked about the perceptions of risk following these events over time (in December 2009 - immediately following the Flight 253 bombing attempt and then at five later time periods: Jan 2010, Feb 2010, May 2010, Sept 2010, and Dec 2010). As proposed, our analysis showed that both the perceived risk for a specific terrorist attack (in this case, the attempted bombing of Flight 253) and the perception of how close the event came to being a disaster decline as time passes from the original event. Further, mixed level modeling showed that the perception of how close the event was to being a disaster partially mediated the influence of time on the decline of the perceived risk. We also showed that the perceived risk for terrorism in general (i.e., not for a specific attack) decays more slowly, and is reactivated by additional terrorist attempts, here the Times Square attack and the Portland tree lighting ceremony plot. Because these latter two attempts are not of the same category as an attempt on an airplane, they do not raise the perceived risk an airplane attack. Yet, they do continue to re-activate people s general terrorism category, so that perceived risk here remains high. 2.2. Research Products Research Product Metrics # # of peer-reviewed journal reports published # of peer-reviewed journal reports accepted for publication # of non-peer reviewed publications and reports 2* # of scholarly journal citations of published reports # of scholarly presentations (conferences, workshops, seminars) 5 # of outreach presentations (non-technical groups, general public) 6 *Two working papers are currently under peer-review for publication. Page 6 of 10

Research Theme Referred Not Referred PDF Sent to CREATE 2.2.1. Publications and Reports CREATE PUBLICATIONS Dillon, Robin 1. Robin L. Dillon, Catherine H. Tinsley, and William J. Burns, Near-Misses and Future Disaster Preparedness, under review at Risk Analysis, submitted August 2013. 2. Robin L. Dillon, Catherine H. Tinsley, and William J. Burns, Evolving Risk Perceptions about Near-Miss Terrorist Events, under review at Decision Analysis, submitted August 2013. * currently under refereed review RP/C x* RP/C x* 2.2.2. Presentations CREATE SCHOLARLY PRESENTATIONS Dillon, Robin 1. Reckoning with the Risk of Catastrophes: The Challenge of Interpreting Prior Near-Miss Events, DFG-NSF Research Conference, 3 5 October 2012, Washington, DC 2. How terrorism near-misses influence perceptions of risk: comparisons and contrasts, Dillon RL, (with Catherine Tinsley and William Burns), Society of Risk Analysis, San Francisco, CA, Dec. 10-12, 2012. 3. How near-misses influence public preparedness and response to tornado weather warnings (with Heather Rosoff and Richard John), Society of Risk Analysis, San Francisco, CA, Dec. 10-12, 2012. 4. How Near-Miss Events Can Increase Risky Decision Making, Security and Human Behavior, Los Angeles, CA, June 3-4, 2013 Shiffman, Gary 5. Economic Perspectives on Substate Violence, War Studies Department, King s College London, October 10, 2013. CREATE OUTREACH PRESENTATIONS Dillon, Robin 1. It Takes A Village: Business Continuity, Risk Management, and Community Collaboration Panel, Advancing and Redefining Communities for Emergency Management Workshop, March 25-26, 2013 Page 7 of 10

CREATE OUTREACH PRESENTATIONS 2. How Near-Miss Events Can Increase Risky Decision Making, presented at the Incentives and Regulation of Cybersecurity Conference, Georgetown University s Center for Business and Public Policy (CBPP)/DHS/NSF, June 13, 2013, Washington DC. 3. Co-presented two (2) S&T sponsored seminars with William Burns and Tim Sellnow for two different DHS groups, July 24, 2013. 4. Attended the DHS sponsored Cyber Risk Culture Roundtable on May 13, 2013 hosted by the National Protection and Programs Directorate. Shiffman, Gary 5. Hosted Professor Peter Neumann from King s College London on July 29, 2013 at Georgetown University. The audience was comprised exclusively of analysts from DHS Office of Intelligence and Analysis, Homeland Counterterrorism Division. 3. Research Transition 3.1. Applied Relevance We have discussed this near-miss research at length with different groups at DHS. This work has been discussed with several constituencies at DHS including the National Protection and Programs Directorate (NPPD), most recently the Office of Cybersecurity and Communications. The NPPD is responsible for motivating private companies to invest in protection measures. Since successful terrorist attacks are rare, natural disaster events usually hit someone else, and most cyberattacks do not have immediate measureable bad consequences, when private companies make decisions based on prior events, many companies are in fact making decisions based on near-misses commonly being interpreted as successes. Our research has shown that this interpretation commonly causes decision makers to take more risk (rather than less), in contrast to the behavior the NPPD is trying to motive. Historically, NPPD has not used psychological data in their analysis. We presented research on near-misses at the Incentives and Regulation of Cybersecurity Conference hosted by Georgetown University s Center for Business and Public Policy (CBPP) in collaboration with DHS and NSF. Additionally, we have discussed this research with individuals at TSA facilitated by Dr. William Burns during his summer residency there. In particular, there was significant interest in learning more about maintaining vigilance over time. Figure 3 shows in-flight anomalies reported for each NASA space shuttle mission through 2010 with exponential trendlines added for the periods before, between, and after the Challenger and Columbia disasters. The concern that vigilance is difficult to maintain resonated with many at TSA and especially as more travelers are shifted to expedited screening. We are further supporting Dr. Burns in his work to improve the risk messaging associated with expedited screening. Page 8 of 10

80 70 60 50 40 30 20 10 0 Figure 3 In-flight anomalies reported for each NASA space shuttle mission 3.2. Collaborative Projects Georgetown is working collaboratively with other partners at CREATE including William Burns, Heather Rosoff, Richard John, and Eli Berman. Based on past research, we have helped expand the research on near-misses in the CREATE portfolio including Drs. John and Rosoff s work on cybersecurity events and severe weather events, and Dr. Rosoff has created some pilot video simulations of tornado warning/near-miss events. This work is also being integrated with William Burns work on risk inoculation. Previous research has found that prior hazard experience can be a mixed blessing it could indeed stimulate protective measures, but it could also be deceptive and evoke a betraying sense of safety. Understanding how people will respond to different near-miss events is critical for inoculating the right message to motivate the desired hazard adjustment behavior. We have also been helping Dr. Burns in his risk communication work with the TSA. We will also work with Adam Rose to ensure that our recommendations are implementable in the economic models of response to events. 4. Education Education Initiatives (Please detail below) # # of students supported (funded by CREATE) 4 # of students involved (funded by CREATE + any other programs) # of students graduated # of student theses or dissertations # of contacts with DHS, other Federal agencies, or State/Local (committees) # of existing courses modified with new material # of new courses developed # of new certificate programs developed # of new degree programs developed Page 9 of 10

CREATE STUDENTS Last Name First Name 1. Teaford Taylor Georgetown 2. Sterman David Georgetown 3. Hsieh Audrey Georgetown 4. Cunningham Ryan Georgetown University School Department Degree Research Area School of Foreign Service School of Foreign Service School of Foreign Service McDonough School of Business Security Studies Program Security Studies Program Security Studies Program MA MA MA Terrorist Risk Factors Terrorist Risk Factors Terrorist Risk Factors OPIM BS Near-Misses X CREATE Funded x x x Graduated 5. Outreach Outreach Initiatives # # of memberships in major DHS-related Committees 1 # of contacts with DHS At least 6* # of contacts with other Federal agencies, or State/Local (committees) # of contacts with State/Local (committees) # of Workshops and Events # of media events *these are detailed throughout this report Table 7. Membership in Major DHS Related Committees, Years 1-9 MEMBERSHIP IN MAJOR DHS-RELATED COMMITTEES Committee Institution Time Period Gary Shiffman, Board of Advisors, DHS/BORDERS Center of Excellence, lead institution: University of Arizona Other meetings and outreach are described earlier in this document in the Outreach Presentation list and the applied relevance section. Page 10 of 10