The effect of terrorism (the 9/11 attacks) on well being in the UK.

The 9/11 attacks in the US are memorable for all the wrong reasons. Just as an older generation remember where they were when JFK was assassinated, most of us will remember the events in the US as it unfolded. This paper quantifies the effects on well-being in the UK.
Destruction and distress: using a quasi-experiment to show the effects of the September 11 attacks on subjective well-being in the UK
Robert Metcalfe,Nattavudh Powdthavee,Paul Dolan
Using a longitudinal household panel dataset in the United Kingdom, where most interviews are conducted in September each year, we are able to show that the attacks of September 11 resulted in lower levels of subjective well-being for those interviewed after that date in 2001 compared to those interviewed before it. This quasi-experiment provides one of the first examples of the impact of a terrorist attack in one country on well-being in another country. We value this effect through a cost of illness approach, which is estimated to be between £170 and £380 million.

Calculating tragedy: assessing the costs of terrorism

In this article Frey et al. (2007) consider the ways in which the effects of terrorist activities have been calculated in the past with a focus on the number of incidents or the impact on the economy. However, such measures are a poor indication of the utility losses associated with terrorism as indicated in their discussion of thirty years of violence in Northern Ireland

"Frey et al. (2004) calculate a hypothetical willingness-to-pay of a resident of Northern Ireland for a reduction in the number of fatalities to the average level of Great Britain and the Republic of Ireland. Accordingly, a resident of Northern Ireland (with average household income) would be willing to pay around 41% of his income for a reduction in terrorist activity to the level that prevails in the more peaceful parts of the country or the sister republic."

A life-satisfaction approach suggests that the decrements in experienced utility associated with terrrorism far outweigh the soley economic consequences.