Terror and Tourism: The Economic Consequences of Media Coverage

90 Pages Posted: 14 Jan 2020

See all articles by Timothy J. Besley

Timothy J. Besley

London School of Economics & Political Science (LSE) - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Thiemo Fetzer

University of Warwick; Centre for Economic Policy Research (CEPR)

Hannes Felix Mueller

Autonomous University of Barcelona

Date Written: January 2020

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.

JEL Classification: D74, D83, F14, F15, H12, L82

Suggested Citation

Besley, Timothy J. and Fetzer, Thiemo and Mueller, Hannes Felix, Terror and Tourism: The Economic Consequences of Media Coverage (January 2020). CEPR Discussion Paper No. DP14275, Available at SSRN: https://ssrn.com/abstract=3518616

Timothy J. Besley (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

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Thiemo Fetzer

University of Warwick ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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United Kingdom

Hannes Felix Mueller

Autonomous University of Barcelona ( email )

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Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

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