“Modeling the impact of wars and terrorism on tourism demand in Kurdistan region of Iraq”

Abstract

Recent political instabilities in the Middle East have led to strong negative impacts on the tourism sector. The aim of this study is to investigate the extent and the impact of political instability on tourism development in Kurdistan region of Iraq (KRI). The impact of previous wars and incidents including the most recent events by the Islamic State in Iraq and Syria (ISIS) on tourism demand is quantitatively evaluated. Unit roots and structural breaks are detected relating political instabilities with significant tourist declines. A systematic comparison on the effect of terrorist attacks and wars on tourist arrivals is performed by employing a multiple regression model using monthly time series data from January 2003 to September 2018. The analysis revealed stronger negative impact of wars in comparison to terrorist attacks. The novelty of this study lies in its ability to establish that the impacts of war have far reaching consequences that last for at least three consecutive years as compared to short negative effects of terrorist attacks. Our findings imply that political instability, especially wars, leads to large safety concerns in the tourist destinations.