Causality between transnational terrorism and tourism: The case of Spain

Abstract

The purpose of this paper is to devise a methodology for estimating the impact of transnational terrorism on tourism. Using monthly data from 1970–1988, we estimate the relationship between terrorism and tourism for Spain. We find that terrorist events have had a significant negative impact on the number of tourists visiting Spain. A typical incident is estimated as scaring away just over 140,000 tourists when all monthly impacts are combined. Moreover, the causality is unidirectional: terrorism affects tourism, but not the reverse.