During the West Coast port lockout in fall 2002, a widely quoted estimate claimed that a 10-day shutdown of port facilities would cost the U.S. economy $1.94 billion a day. This article argues that the estimated economic losses were vastly over inflated, and the episode provides an opportunity to reflect on the use of economic impact studies to study short-term disruptions of infrastructure services. Port impact studies are deficient in this task because they do not adequately address the possibilities for substitution, even in the short run. In part, this is because port impact studies are poorly designed to deal with the changing nature of the relationship between seaport operations and regional economic development. Impact studies assume a continuous monotonic relationship between cargo throughput and economic measures. This ignores the fact that port-using firms have differential abilities to adjust to disruptions and that their adjustment behavior creates both losers and winners.
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