Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 733: Everybody's a Victim? Global Terror, Well-Being and Political Attitudes
Alpaslan Akay (), Olivier Bargain and Ahmed Elsayed
Additional contact information
Alpaslan Akay: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: P.O. Box 640, SE 40530 GÖTEBORG, Sweden
Olivier Bargain: Bordeaux University and the Institut Universitaire de France (France)
Ahmed Elsayed: IZA (Germany)
Abstract: Terror has become a global issue. Terror acts perpetuated by religious, nationalist or political groups around the globe can propagate distress rapidly through different channels and possibly change political attitudes. This paper suggests the first evaluation of the impact of global terror on human welfare. We combine panel datasets for Australia, Germany, Russia, Switzerland, the UK and the US. Individual well-being informationfor 750,000 individualxyear observations, recorded on precise dates, is matched with daily information on the 70,000 terror events that took place worldwide during 1994-2013. High-frequency data and quasi-random terror shocks of varying intensity provide the conditions for robust inference, while external validity is guaranteed by the use of large representative samples. We find a significantly negative effect of global terror on well-being, with a money-metric cost of around 6% - 17% of national income. Among diffusion channels, stock markets and economic anticipations play a minimal role, while traditional media filter the most salient events. The effect is greatly modulated by the physical, genetic or cultural proximity to the terror regions/victims. For a subset of countries, we also show that global terror has significantly increased the intention to vote for conservative parties. Heterogeneity analyses point to the mediating effect of risk perception: individuals who exhibit stronger emotional responses to terror possibly more exposed to potential threats - are also more likely to experience a conservative shift.
Keywords: Global Terror; Subjective Well-Being; Media; Political Attitudes
JEL-codes: C99; D60; D72; D74; I31
49 pages, June 2018
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