Is Violence in Mexico Affecting International Tourism?

Cabral, Rene; Saucedo, Eduardo

Abstract

This paper analyzes the impact of criminal violence on international tourism demand in Mexico. The analysis employs monthly airport-level data for the period 2006-2024. We construct a composite violence index based on homicides, robberies, and kidnappings per 100,000 inhabitants and estimate a log-linear fixed-effects model that distinguishes among total, leisure, and business international passenger flows. The empirical framework incorporates macroeconomic controls closely linked to Mexico’s foreign demand conditions, including a proxy of U.S. economic activity, a U.S. index of economic policy uncertainty, and Mexico’s remittances receipts. The results indicate that violence exerts a statistically significant and economically meaningful negative effect on total and leisure-oriented passenger flows, while business travel appears comparatively less sensitive, as the magnitude of the elasticity is larger in coastal, leisure-dependent airports. Time-varying beta estimations reveal heterogeneous sensitivity across subperiods, particularly during periods of heightened macroeconomic volatility. Crime appears to have a detrimental effect on international tourism, though its impact has been less pronounced since the COVID-19 pandemic.

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Tourism and Hospitality Experience Management

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Is Violence in Mexico Affecting International Tourism?

Abstract

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Primary Track