It is true that many children and adolescents are drawn to horror movies, It is equally true that many of these same children experience negative effects of trouble falling asleep, nightmares,fear of the dark, anxiety, increased feelings of vulnerability and increased concerns about possible (and sometimes unlikely) dangers that can befall them, These negative effects sometimes last days or weeks but sometimes they can last much longer.
One area of major concern is that the line between fantasy and reality is blurred for children younger that six or seven. Young children live in the magical world of Santa Claus and the Easter Bunny. The images of ghosts, monsters, human predators, bodily mutilation and blood and gore can feel just as real and can be emotionally absorbed as easily as the image and positive emotional impact of Santa.
Even for adolescents, horror movies can have serious lasting effects. It is certainly true that the amount of violence and blood and gore has increased and has steadily been depicted with more detail and realism over the last 50 years. Beyond this the horror movies watched by adolescents often contain disturbing sexual images and situations that can alter their view of human sexuality.
The primary reason that horror movies can be so harmful is that although we may know in our mind that the movie is not real, our body and our physiological responses react to the images and events as if they were real! This is why we scream, gasp, cover our eyes, and clutch our loved one. Physiologically, our heart beats more rapidly, our breathing becomes more shallow, our palms begin to sweat as if these imaginary stimuli were real. In other words although our mind knows what is real and what is not, our body and our physiology does not make this distinction.