Does terrorism reduce life satisfaction?

ABSTRACT

We study the effect of terrorism on life satisfaction for a sample of 81 countries over the 1994–2009 period. We find that terrorism is robustly associated with less life satisfaction. This effect, however, translates into only modest social costs.

KEYWORDS:

• Terrorism
• life satisfaction
• cost-benefit analysis

JEL CLASSIFICATION:

• I31
• D61
• D74

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The models are estimated with pooled OLS. As also argued by Bjørnskov et al. (2010, 422), a fixed-effects approach is not advisable with a small sample containing many variables (including life satisfaction) that only change very slowly over time. As a robustness check, we report results from a Prais–Winsten regression with panel-corrected SEs. This estimation approach is also used in Bjørnskov, Dreher, and Fischer (2010).

² As Bjørnskov, Dreher, and Fischer (2007) find that post-communist countries see markedly lower levels of life satisfaction, we report the results for this regional dummy; the results for the other dummies are not shown.

³ The majority of countries in our sample faced comparable or somewhat lower terrorism threats.