War affects people’s lives on almost every economic, social, and political dimension. This complexity has prompted many researchers to focus solely on measuring the costs of war to aggressor countries, which are easy to calculate across regions. This approach is problematic because it disregards a large portion of international conflicts. Indeed, in interstate conflicts, the cost of war can be expected to be higher for countries in which the war is fought. However, there have been few scholarly efforts to empirically analyze these greater costs. In this paper, I first provide a theoretical framework outlining the mechanisms through which target regions experience higher costs than aggressor countries. I then use a mixed-method approach to conduct a cross-country analysis of the effect of war on the short-term GDP of target regions and aggressor countries. This model is further applied to a case study of the Vietnam War. The evidence shows that target regions experience significantly greater short-term costs of war, due to increased destruction effects and disruption of social order. Furthermore, target regions experience slower recovery rates as well as a greater propensity to endure long-term war overhangs due to war remnants like unexploded ordnance (UXO), population displacement, and chemical contamination.