1 Does Terrorism Pay? An Empirical Analysis  (Forthcoming in Terrorism and Political Violence) Max Abrahms, Northeastern University Matthew S. Gottfried, UCLA  Max Abrahms is Assistant Professor of Political Science at Northeastern University. He is the author of Why Terrorism Does Not Work, International Security (2006) and other studies on the consequences of terrorism. Matthew Gottfried is a Ph.D. candidate in the department of political science at UCLA. The authors wish to thank Steven Pinker, Robert Trager, and Ron Gurantz for excellent research suggestions. All data and estimation files are available upon request.