Effect that is not a direct consequence of an event, incident, or occurrence, but is caused by a direct consequence, subsequent cascading effects, and/or related decisions.
Sample Usage: In the following months, decreased commerce and tourism were among the indirect consequences resulting from the hurricane.
- Examples of indirect consequences can include the enactment of new laws, policies, and risk mitigation strategies or investments, contagion health effects, supply-chain economic consequences, reductions in property values, stock market effects, and long-term cleanup efforts,
- Accounting for indirect consequences in risk assessments is important because they may have greater and longer-lasting effects than the direct consequences.
- Indirect consequences are also sometimes referred to as ripple, multiplier, general equilibrium, macroeconomic, secondary, and tertiary effects.
- The distinction between direct and indirect consequences is not always clear but what matters in risk analysis is a) capturing the likely effects – be they designated as direct or indirect – that should be part of the analysis, b) clearly defining what is contained as part of direct consequences and what is part of indirect consequences, and c) being consistent across the entire analysis. Such consistency and clarity is important for comparability across scenarios and risk analyses.
- Induced consequences are occasionally estimated separately from indirect consequences but should be contained within indirect estimates.
Source: DHS Risk Lexicon, U.S. Department of Homeland Security, 2010 Edition. September 2010 Regulatory Guidance