The paper investigates whether there is a connection between poverty or low education and terrorism. We review evidence on hate crimes, which are closely related to terrorism; the occurrence of hate crimes is largely independent of economic conditions. We analyze data on support for attacks against Israeli targets from public opinion polls conducted in the West Bank and Gaza Strip; support for violent attacks does not decrease among those with higher education and higher living standards. The core contribution of the paper is a statistical analysis of the determinants of participation in Hezbollah militant activities; having a living standard above the poverty line or a secondary or higher education is positively associated with participation in Hezbollah. We also find that Israeli Jewish settlers who attacked Palestinians in the West Bank in the early 1980s were overwhelmingly from high-paying occupations. Although our results are tentative and exploratory, they suggest that neither poverty nor education has a direct, causal impact on terrorism.
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