The effects of terrorism on happiness: Evidence from Turkey

Abstract

The economic effects of terror attacks have been extensively examined in the literature. Yet there is a paucity of empirical research investigating their effect on welfare. Existing studies suggest that, in addition to economic costs, terror also imposes social costs. Using both micro-level data at the individual level and macro-level data at the provincial level, this article examines the association of terror and happiness in Turkey. To address income endogeneity, the conditional mixed process estimation method is employed. The results indicate that while a bidirectional relationship between happiness and income level exists, terror negatively affects happiness. Additional factors such as perceived relative income, gender, employment status, and household size have significant effects on individual wellbeing as well. The findings suggest that measuring only the economic costs of terror fails to capture the full extent of the costs imposed on society.