Economic Impact of Terrorist Incidents on the Hospitality
Industry in Italy
Principal Investigators: Robert Greenbaum,
Andy Hultquist
Acts of terror are intended to incite fear and intimidation.
As such, they receive a great deal of attention from the
media and policy-makers. It is debatable whether such
attention is warranted based on the economic damage that
terrorism causes. For this reason, it is important to
accurately measure the economic impact of terrorism
Terrorism inflicts direct economic damage through destruction
of physical property, injuries and deaths, and law enforcement
expenditures. But it also inflicts indirect damage by
raising the cost of doing business and making it harder
for companies to attract customers and employees. Business
and leisure travel is also deterred.
This project examined the indirect costs of terrorism
on the hospitality industry – thought most vulnerable
to terrorist attacks – in Italy from 1994 to 1997.
The data came from two main sources. Data on terrorist
incidents at the city level in Italy came from Pinkerton’s
Global Intelligence Services, while data on hotel utilization
came from the Tourism Council of the National Association
of Italian Municipalities (ANCI).
The study found that lodgings used by foreign visitors
are most sensitive to terrorist attacks, and that the
impact was felt most during the first year after the attack.
Greenbaum presented this study at several conferences
including the Regional Science Association International
meeting in 2005, and the National Consortium for the Study
of Terrorism and Responses to Terrorism (START) meeting
in 2006.
An article by Greenbaum and Hultquist, “The Economic
Impact of Terrorist Incidents on the Italian Hospitality
Industry,” was published in Urban Affairs Review in September 2006.
Greenbaum has also applied for additional funding from
the Department of Homeland Security to study the impact
of both international and domestic terrorism in the United
States.
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