The State‐by‐State Economic Impacts of the 2002 Shutdown of the Los Angeles–Long Beach Ports

Abstract

ABSTRACTIn previous research, the economic impacts of temporary shutdowns of the Los Angeles–Long Beach harbors were simulated after a hypothetical terrorist attack, applying the National Interstate Economic Model to estimate state‐by‐state as well as interindustry impacts. However, the unpredictable characteristic of terrorist attacks might not be applicable to the case of a ports shutdown such as the one caused by the lockout of September–October 2002. Market participants can be expected to have contingency plans based on anticipations of a strike or shutdown. Can we identify any of these in terms of the use of alternate ports, in terms of alternate modes or even alternate time periods? The purpose of this study is to examine these questions. The approach is elaborated by testing for the possible effects of trade diversion to other West Coast ports, transportation modes, and intertemporal substitutions. We use data from WISERTrade describing commodity‐specific trade for the major West Coast ports before, during, and after the 11‐day shutdown of the fall of 2002. Shippers’ ability to divert trade is a key ingredient in the economy's ability to withstand attacks and disruptions. The work estimates the impacts on 47 industrial sectors across 50 states (and the District of Columbia).