9/11: A Case Study

significant amount of people were too scared to even go on a vacation somewhere out of fear that if they went to a heavily populated city that they may become some of the next victims of terrorist attacks. Following the tragedy of 9/11, some pilots felt, “compelled to carry a weapon at work as a way to regain power, prestige, and a sense of security and control” because they were having difficulty reconciling, “fear, guilt, anxiety, and overwhelming sense of responsibility for elements outside of their control” (Fraher 2014). This provides another example of how the fear caused by 9/11 had deep and reaching effects on both the nation and its economy. Although it was largely an indirect effect caused by the hit to transportation industries, such as airlines, freight trains, etc., the shipping industry also suffered as a direct result of 9/11. Relative to other major industries that suffered losses however, the shipping industry was able to recuperate its losses more quickly after 9/11. For instance, “maritime shipping rates increased by 5 to 10 percent on average in the two weeks following the attack” (Looney 2002), but this upward climb in shipping rates revered itself soon after. There were other economic factors occurring around the same time as 9/11 such as, a drop in fuel prices and …show more content…
One study concluded that after and in response to 9/11, “there was an increase in systematic risk on a set of airline stocks” (Homan 2009). The study went on to say that 9/11 also significantly increased the idiosyncratic risk of the firms and that this, combined with the increase in systematic risk, greatly increased the overall market risk of the studied firms (Homan 2009). The increased volatility that resulted from this increased risk then in turn caused a reduction in, “trading activity and market arbitrage” (Homan