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Methods for Measuring Aggregate Costs of Conflict

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  • Gardeazabal, Javier

Abstract

This paper reviews the methods for measuring the economic cost of conflict. Estimating the economic costs of conflict requires a counterfactual calculation, which makes this a very difficult task. Social researchers have resorted to different estimation methods depending on the particular effect in question. The method used in each case depends on the units being analyzed (firms, sectors, regions or countries), the outcome variable under study (aggregate output, market valuation of firms, market shares, etc.) and data availability (a single cross-section, time series or panel data). This paper reviews existing methods used in the literature to assess the economic impact of conflict: cost accounting, cross-section methods, time series methods, panel data methods, gravity models, event studies, natural experiments and comparative case studies. The paper ends with a discussion of cost estimates and directions for further research.

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Bibliographic Info

Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 2010-09.

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Date of creation: Sep 2010
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Handle: RePEc:ehu:dfaeii:201009

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Postal: Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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Keywords: cost of conflict; estimation; methods;

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Cited by:
  1. Stergios Skaperdas, 2009. "The Costs of Organized Violence: A Review of the Evidence," Working Papers 080924, University of California-Irvine, Department of Economics.

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