Tourism and Terrorism from an Economic Point of View

This article reviews the economic literature on the economic and social costs of terrorism with a special emphasis on the consequences on the tourism industry. Several studies find a negative and economically important effect of terrorism on tourism demand. The studies also highlight differences in the consequences of different types of terror attacks, causality, the temporal patterns of the impact as well as interdependencies between different countries' tourism industries and their terrorist campaigns. Further, the paper briefly discusses studies on the consequences on foreign direct investment, consumption, savings and investment, international trade, overall economic development and on subjective life satisfaction.