Who has terror angst? Perceptions of the effects of terror on the world economy

ABSTRACT

We examine sources of biased terror perceptions. In particular, we investigate how international experts of the IFO World Economic Survey assess the effect of terror on the world economy and the economy of their own country. The results show that respondents from terror-stricken countries have more favourable views on the effect of terror on the word economy (but not on their own countries). Male respondents and those from democratic and richer countries are likewise more optimistic.

KEYWORDS:

• Terror
• terror angst
• terror perceptions
• consequences of terror

JEL CLASSIFICATION:

• D74
• D84
• F01

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ https://www.cesifo-group.de/ifoHome/publications/journals/CESifo-World-Economic-Survey.html., Garnitz et al. (2016). The survey has been shown to predict business cycles quite well, cf. Kudymowa, Plenk, and Wohlrabe (2013).

² We used fatalities as alternative measure of terror with similar results (available upon request).

³ All other subjects are in sign and significance very similar to economists. We also included respondents’ affiliations, none of which had a significant effect (results not reported).

⁴ Coefficients for dummies ‘1–10 incidents’ and ‘11–100 incidents’ are not significantly different (model 1).

⁵ We carried out a number of further robustness checks (see fn. 2). We used gross national income per capita and the human development index in lieu of GDP per capita, we used incidents and fatalities in levels rather than in logs and we replaced the two dummies for religion by a variable for the share of Muslims in the country. These changes did not affect our results in any significant way. Results are available upon request.