We analyze spatial spillover effects in international tourism as a consequence of transnational terrorist attacks. Specifically, we hypothesize that attacks executed in Islamic countries on citizens from Western countries will generate spatial spillovers of three kinds. Firstly, tourism from the victims’ countries to Islamic destination countries other than the location of the attacks will decline. Secondly, tourism from other Western countries to the country in which the attacks took place will decline. Thirdly, tourism from other Western countries to other Islamic destination countries also will decline. These spatial spillover effects occur because the terror message is strategically addressed at Western citizens in general rather than the tourists’ countries of origin per se. Tourists update their priors after such attacks, rationally expecting a greater chance of becoming victimized in other Islamic countries as well, given the transnational character of Islamist terror groups and the limited capacity of governments in Islamic countries to prevent such attacks.
Neumayer, Eric & Thomas Plümper (2016) Spatial spill-overs from terrorism on tourism: Western victims in Islamic destination countries, Public Choice 169 (3): 195–206.