This paper examines the economic consequences of terror attacks by exploiting the inherent randomness in the success or failure of terror attacks. The findings suggest that successful attacks, in comparison to failed attacks, reduce the number of jobs and total earnings in targeted counties by approximately 2 percent in the years following the attack. Analyzing the channels, I find that successful attacks affect, in particular, specific industries such as housing. Last, I show that successful attacks receive more media coverage and increase levels of consumer pessimism in terms of business conditions and buying conditions.
"The Effect of Terrorism on Employment and Consumer Sentiment: Evidence from Successful and Failed Terror Attacks."
American Economic Journal: Applied Economics,
Consumer Economics: Empirical Analysis
Household Saving; Personal Finance
Wage Level and Structure; Wage Differentials
Illegal Behavior and the Enforcement of Law
Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics