AN ECONOMETRIC-ANALYSIS OF THE IMPACT OF TERRORISM ON TOURISM

This paper quantifies the impact that terrorism has had on tourism since 1970. To accomplish this task, we estimate a forecasting equation fora country's (region's) sham of tourism using an ARIMA model with a transfer function based on the time series of terrorist attacks in that country (or region). Our results focus on three European countries-Greece, Italy, and Austria-have experienced noteworthy terrorist attacks since 1970. We also calculate revenue losses for continental Europe. Since 1974 these losses are large, amounting to 16 billion SDRs in present value terms. Much of the loss occurred in the 1980s.