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Terrorism and international air travel: a gravity approach

journal contribution
posted on 2018-11-01, 00:00 authored by D Mitra, Cong PhamCong Pham, S Bandyopadhyay
We present a theoretical model (adapted from the structural gravity model by Anderson and van Wincoop, American Economic Review, 93, 2003, 170) to capture the effects of terrorism on air passenger traffic between nations affected by terrorism. We then use equations derived from this model, in conjunction with alternative functional forms for trade costs, to estimate the effects of terrorism on bilateral air passenger service flows from 58 source countries to 26 destination countries during 2000-14. An additional small-scale terrorist incident in the origin country and destination country together results in a reduction in bilateral air passenger travel by, at least, 1.3% and 0.81%, respectively, for pairs of countries located 1,000 and 2,000 km or less apart. The adverse impact of transnational terrorism is approximately five times larger. Terrorism adversely impacts bilateral air passenger travel both by reducing national output and especially by increasing psychological distress. Last but not the least, international air passenger travel is found to be extremely sensitive to fatal terrorist attacks and terrorist attacks on targets such as airports, travel or tourists.

History

Journal

The world economy

Volume

41

Issue

11

Pagination

2852 - 2882

Publisher

Wiley

Location

Chichester, Eng.

ISSN

0378-5920

eISSN

1467-9701

Language

eng

Publication classification

C Journal article; C1 Refereed article in a scholarly journal

Copyright notice

2018, John Wiley & Sons Ltd

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