Enders, Walter; Hoover, Gary A. & Sandler, Todd
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The Changing Nonlinear Relationship between Income and Terrorism

Journal of Conflict Resolution

Abstract

This article reinvestigates the relationship between real per capita gross domestic product (GDP) and terrorism.We devise a terrorism Lorenz curve to show that domestic and transnational terrorist attacks are each more concentrated in middle-income countries, thereby suggesting a nonlinear income‰ÛÒterrorism rela- tionship. Moreover, this point of concentration shifted to lower income countries after the rising influence of the religious fundamentalist and nationalist/separatist terrorists in the early 1990s. For transnational terrorist attacks, this shift charac- terized not only the attack venue but also the perpetrators' nationality. The article then uses nonlinear smooth transition regressions to establish the relationship between real per capita GDP and terrorism for eight alternative terrorism sam- ples, accounting for venue, perpetrators' nationality, terrorism type, and the period. Our nonlinear estimates are shown to be favored over estimates using lin- ear or quadratic income determinants of terrorism. These nonlinear estimates are robust to additional controls.