Out of the Frying Pan into the Fire: Behavioral Reactions to Terrorist Attacks

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Abstract
A low‐probability, high‐damage event in which many people are killed at one point of time is called a dread risk. Dread risks can cause direct damage and, in addition, indirect damage mediated though the minds of citizens. I analyze the behavioral reactions of Americans to the terrorist attacks on September 11, 2001, and provide evidence for the dread hypothesis: (i) Americans reduced their air travel after the attack; (ii) for a period of one year following the attacks, interstate highway travel increased, suggesting that a proportion of those who did not fly instead drove to their destination; and (iii) for the same period, in each month the number of fatal highway crashes exceeded the base line of the previous years. An estimated 1,500 Americans died on the road in the attempt to avoid the fate of the passengers who were killed in the four fatal flights.

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