Title: A prospect theory application to understand tourism in terror infested destinations

Authors: Shivendra Kumar Pandey

Addresses: Indian Institute of Management Rohtak, Management City, Southern Bypass, NH10, Sunaria, Rohtak, Haryana, 124001, India

Abstract: Rational consumers avoid travel destinations with terrorism associated but a set of customers go despite the risk. The current study used prospect theory as plausible explanations of such irrational behaviours by using domestic and international tourist arrivals to a terror-infested destination. Multiple regressions with independents such as terror and peace yielded exciting results. Terror events affect tourist arrivals, but peace was not significant. No long-term effect of terrorism on tourism was found in the ten-year study period. Both domestic and international tourist arrivals showed high growth with adequate prediction and less variability. Prospect theory tenets of loss aversion and relative change found support whereas isolation effect was not supported. Implications for tourism managers and media managers are highlighted.

Keywords: terrorism; tourism; utility; prospect theory; loss; gain.

DOI: 10.1504/IJKMTH.2018.099257

International Journal of Knowledge Management in Tourism and Hospitality, 2018 Vol.2 No.1, pp.87 - 103

Received: 25 Jan 2018
Accepted: 02 Dec 2018

Published online: 10 Apr 2019 *

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