Spillover Costs of National Security Policies

Abstract

We assess whether national security policies influence tourism exports by using a difference-in-differences approach to evaluate the effect of Executive Order 13769 in January 2017 on visitor arrivals from the Middle East. We find that the volume of visitor arrivals from the Middle East declined by about a quarter following this policy change. These results are robust to alternative estimation approaches and they offer novel insights into how national security laws and policies may affect international travelers' destination trust.

Keywords: Policy evaluation; National security; Travel ban; Destination trust

JEL Classification: F50, Z30, Z38