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Terror and Tourism : The Economic Consequences of Media Coverage

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  • Besley, Timothy

    (London School of Economics)

  • Fetzer, Thiemo

    (Warwick University)

  • Mueller, Hannes

    (IAE - CSIC)

Abstract

This paper studies the economic effects of news-coverage of violent events. To do so, we combine monthly aggregated and anonymized credit card data on tourism spending from 114 origin countries and 5 tourist destinations (Turkey, Egypt,Tunisia,Israel and Morocco) with a large corpus of more than 446 thousand newspaper articles covering news on the 5 destination countries from a subset of 57 tourist origin countries. We document that violent events in a destination are followed by sharp spikes in negative reporting at origin and contractions in tourist activity. Media coverage of violence has a large independent effect on tourist spending beyond what can be accounted for by controlling for the incidence of violence. We develop a model in which tourist beliefs, actual violence and media reporting are modelled together. This model allows us to quantify the effect of violent events and reporting.

Suggested Citation

  • Besley, Timothy & Fetzer, Thiemo & Mueller, Hannes, 2019. "Terror and Tourism : The Economic Consequences of Media Coverage," The Warwick Economics Research Paper Series (TWERPS) 1235, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1235
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • F15 - International Economics - - Trade - - - Economic Integration
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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