DEREKH CORNWELL AND BRYAN ROBERTS
April 1, 2010 - The terror attacks of September 11, 2001 had an immediate and substantial impact on international travel worldwide. The attacks induced substitution away from air travel generally and caused a shift in the preferences of travelers for particular destinations. The United States in particular experienced an immediate and precipitous drop in arrivals of international visitors, particularly from those flying in from overseas. The initial drop in arrivals immediately following 9/11 in part reflected widespread concern about the safety of international air travel. Economic factors most likely also played a role in reducing travel to the United States in the aftermath of 9/11. Between 2001 and 2002, for example, the global economy experienced a recession that reduced demand for air travel generally. In addition to safety concerns and deteriorating economic conditions, the perception that U.S. visa policy became more restrictive in the wake of 9/11 may also have negatively impacted arrivals. Such perceptions prompted concern within the travel industry that the United States was becoming a less attractive travel destination and was damaging its image abroad (Alden, 2008).
Although visa policy itself did not significantly change after 9/11, the security screening procedures that are part of the visa application process were standardized and intensified (Yale-Loehr et al., 2005). After the 9/11 attacks, for example, certain administrative procedures related to visa issuance and entry at the U.S. border were implemented as part of an enhanced travel security protocol. The security procedures related to visa issuance only affected visa applicants travelling to the United States and did not affect travelers from countries participating in the Visa Waiver Program (VWP). Moreover, while travelers from VWP and non-VWP countries were exposed to the same screening procedures upon entry to the United States, some travelers from non-VWP countries were subject to an additional layer of processing. Taken together, the fact that VWP travelers are exempt from the visa issuance procedures and are not exposed to the additional entry processing that some non-VWP arrivals undergo introduces inter-country variation that can be used to test whether the new administrative procedures actually reduced travel to the United States among travelers needing a visa.