Quantifying fear: the social impact of terrorism

Transcription

1 The Economic Analysis of Terrorism: The Current State of Research and its Policy Relevance Quantifying fear: the social impact of terrorism Juan Prieto-Rodríguez (Universidad de Oviedo, Spain) Juan Gabriel Rodríguez (Universidad Rey Juan Carlos de Madrid, Spain) Rafael Salas (Universidad Complutense de Madrid, Spain) Javier Suarez-Pandiello (Universidad de Oviedo, Spain)

2 Index A theoretical proposal for an index: Methodological decisions Information Theory approach Aggregation functions Estimation of weights: Data base Dependent variable Regression Empirical exercise: social impact of ETA

3 A theoretical proposal for an index Methodological decisions. Ordinal approach Vs cardinal approach 2. Uni-dimensional approach Vs multidimensional approach 3. Dimensions: orthogonally Vs substitutability 4. Axiomatic approach Vs Information Theory approach (Theil, 967)

4 A theoretical proposal for an index Information Theory approach N = {,2,..., n} set of terrorist attacks in a period of time D = {,2,..., d } set of dimensions X = { x ij } Ω nxd matrix where x ij is the outcome of the terrorism attack i in terms of the dimension j T ( X ) = f ( X ) : Ω R T (X)=0 iff x ij =0 i and j but not upper bound!

5 A theoretical proposal for an index Aggregation functions. Lexicographic ordering: = = = d j y y y y y d d j j 2 2 x, x... x, x x T(Y) T(X) where = = n i j x ij x Problems: no substitution, no continuity

6 A theoretical proposal for an index Aggregation functions Assume: X = ( x x... 2 x c c cd ) where xcj = x j Estimation of a translog, CES or Cobb-Douglas function requires logarithms Linear function: d T ( X ) = ω j= jx cj d = j= 2 2 Quadratic function: T( X ) ω jxcj + ωxc + ω22xc2 + ω2xc xc2

7 Estimation of weights Main purpose of terrorist activity = make their goals notorious to society We proxy social valuation by presence in the media Data Bases Daily data on ETA activities from: El Pais, El Mundo, ABC and La Vanguardia 2 Variables:photograph in the cover page; percentage of the news about terrorism on the cover page; percentage of the news about terrorism in the editorial section; total number of pages and so on TWEED: Terrorism in Western Europe: Events data (Engene, 2006) Period:

8 Estimation of weights Dependent variable: social valuation of terrorist activities Factor analysis: Model (4 variables) and Model 2 (2 variables) Eigen value Difference Proportion Cumulative Factor Factor Factor Factor Variable Weight Factor Uniqueness Cover photograph % Cover % Editorial Total number of pages N 537 LR test [independent vs. saturated chi2(66)] Kaiser-Meyer-Olkin measure AIC (Factor) BIC (Factor)

9 Estimation of weights Regression Dependent variable: social valuation of terrorist activities Explicative variables: killed people; injured people; type of attack (letter bomb, car bomb, other bomb, grenade attack, armed attack and other attack); kidnappings; target (military, police, public service, political institution, business and civil); and, dummies for time and newspapers. Estimated coefficients = weights

10 Estimation of weights Main Results The quadratic specification fits better Social impact saturation for killed people (4) and injured people (60) Kidnapping: largest coefficient., best strategy? Kidnapping and armed attack: larger coefficient than killed people killed people does not include the whole terrorism phenomenon Newspapers have a different sensitivity towards terrorism The marginal rate of substitution between killed and injured people at the mean value is 2.22

11 Empirical exercise Social impact of ETA After smoothing by the Nadaraya-Watson nonparametric estimator T Killed Truce T( ) Killed

12 Empirical exercise Social impact of ETA

13 Empirical exercise Social impact of ETA

14 Conclusions Multidimensional index of terrorism: eligible for national and international terrorism, any country and any time period. Weights based on social impact of terrorism Information in the media as a proxy of social impact ETA terrorism has decreased non-monotonically since 994