Adaptation Patterns and Consumer Behavior as a Dependency on Terror

Mind & Society, 2014, 13(2): 257-269. DOI: 10.1007/s11299-014-0154-8

Posted: 7 May 2018

See all articles by Aviad Tur-Sinai

Aviad Tur-Sinai

Max Stern Academic College of Emek Yezreel; University of Rochester - School of Nursing; Hebrew University of Jerusalem

Date Written: November 1, 2014

Abstract

Terror may have dire implications for the public’s behavior. According to Kirschenbaum (J Homel Secur Emerg Manag 3(1/3):1–33, 2006), in order to minimize the expected impact of a terror incident the public has to adopt a ‘‘survival strategy’’. According to the underlying research hypothesis of the study, the longer the terror incidents continue, the more the public accepts the possibility that it will be in this situation for the long term; therefore, the extent of its deviation from its ordinary consumer behavior steadily declines after each terror incident. By using daily trade data and an Event Studies econometric methodology, we found the existence of an adaptation trend among the consumer public. Thus, over time, the Israeli public internalized the realization that if it wishes to sustain a reasonable standard of living, it must minimize the disparity between its consumer economic behavior before a terror event and its behavior afterwards. Announcing more assassinations of terrorists was found to calm the public’s fears, when fears are judged by a return to more normal consumption patterns. Another finding is the existence of variance in the pace of this adaptation as a dependency of the type of good consumed: consistently, the adaptation is faster in regard to non-durable goods than to durable goods. This outcome is subject to interpretation, since durable goods may be viewed as ‘‘half-consumption goods, half-capital goods,’’ it stands to reason that capital goods would be more strongly affected than consumption goods.

Keywords: Adaptation, Event study, Durable goods, Non-durable goods

JEL Classification: G14, L67, L68

Suggested Citation

Tur-Sinai, Aviad, Adaptation Patterns and Consumer Behavior as a Dependency on Terror (November 1, 2014). Mind & Society, 2014, 13(2): 257-269. DOI: 10.1007/s11299-014-0154-8, Available at SSRN: https://ssrn.com/abstract=3166029

Aviad Tur-Sinai (Contact Author)

Max Stern Academic College of Emek Yezreel ( email )

Emek Yezreel, 19300
Yezreel 19300
Israel

University of Rochester - School of Nursing ( email )

Helen Wood Hall
601 Elmwood Ave
Rochester, NY 14642
United States

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, Jerusalem 91905
Israel

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