This paper presents an assessment of the effects of terrorism on tourism by using time series methods, namely the ARMAX (autoregressive moving average with explanatory variables) model. This is a single-equation approach, which has the ability to provide impact analysis easily. The use of the ARMAX model allows for the general shape of the lag distribution of the impacts of the explanatory variables based on the ratio of lag polynomials for the independent and dependent variables. The ARMAX models, like the ARIMA models, provide for a short-term assessment of terrorist incidents on tourism.
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