The Connection between the Risk of Terrorism and Its Economic and Political Determinants, Analysis, and Application for Forecasting

ABSTRACT The paper is focused on studying the relationship between the risk of terrorism and economic and political development of 13 European countries, quantified using a set of socio-economic and political indicator variables. Numbers of terrorist attacks are used as a terrorist activity indicator. A method of categorization of the numbers of terrorist attacks into a level of risk of terrorism index is presented. Proportional odds multinomial logit generalized linear model is used to describe the connection between the level of risk and the socio-economic and political indicator variables. The presented findings imply that the connection is significant for 9 out of the 13 studied countries. Furthermore, a possible application of the model for obtaining short time predictions of the probability of the levels of risk is presented using a real data set.