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Quantifying the Microeconomic Effects of War: How Much Can Panel Data Help?

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  • Margarita Pivovarova

    ()
    (Department of Economics, University of Toronto)

  • Eik Leong Swee

    ()
    (Department of Economics, University of Melbourne)

Abstract

The extensive coverage of household surveys in conflict regions in recent decades has fueled a growing literature on the microeconomic effects of war. Most researchers identify these effects using econometric methods, with difference-indifferences – which exploits variation across birth cohorts and war intensity – being the most popular. This paper highlights problems of endogenous war intensity and selfselection due to non-random displacement when using common empirical methods on cross-sectional data, and explains how they can be overcome with panel data. We draw on a unique set of cross-sectional and panel data from Nepal to demonstrate our proposition. Both unobserved locality factors and individual heterogeneity lead to huge swings in the estimates of war intensity effects. Our results imply that researchers ought to think carefully about empirical methods and explain possible statistical biases, especially when their results are used to inform policy decisions. For researchers who use panel data, we propose augmentations to existing methods.

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Bibliographic Info

Paper provided by Households in Conflict Network in its series HiCN Working Papers with number 116.

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Length: 36 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:hic:wpaper:116

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Web page: http://www.hicn.org

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  1. Richard Akresh & Damien de Walque, 2008. "Armed Conflict and Schooling: Evidence from the 1994 Rwandan Genocide," HiCN Working Papers 47, Households in Conflict Network.
  2. Daniel Chiquiar & Gordon H. Hanson, 2002. "International Migration, Self-Selection, and the Distribution of Wages: Evidence from Mexico and the United States," NBER Working Papers 9242, National Bureau of Economic Research, Inc.
  3. Karen Macours, 2011. "Increasing inequality and civil conflict in Nepal," Oxford Economic Papers, Oxford University Press, vol. 63(1), pages 1-26, January.
  4. Shemyakina, Olga, 2011. "The effect of armed conflict on accumulation of schooling: Results from Tajikistan," Journal of Development Economics, Elsevier, vol. 95(2), pages 186-200, July.
  5. Quy-Toan Do & Lakshmi Iyer, 2010. "Geography, poverty and conflict in Nepal," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(6), pages 735-748, November.
  6. Christine Valente, 2011. "What Did the Maoists Ever Do for Us? Education and Marriage of Women Exposed to Civil Conflict in Nepal," HiCN Working Papers 105, Households in Conflict Network.
  7. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
  8. Edward Miguel & Gerard Roland, 2006. "The Long Run Impact of Bombing Vietnam," NBER Working Papers 11954, National Bureau of Economic Research, Inc.
  9. Catherine rodríguez & fabio s�nchez, 2012. "Armed Conflict Exposure, Human Capital Investments, And Child Labor: Evidence From Colombia," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(2), pages 161-184, April.
  10. Ouarda Merrouche, 2006. "The Human Capital Cost of Landmine Contamination in Cambodia," HiCN Working Papers 25, Households in Conflict Network.
  11. Mevlude Akbulut-Yuksel, 2009. "Children of War: The Long-Run Effects of Large-Scale Physical Destruction and Warfare on Children," HiCN Working Papers 62, Households in Conflict Network.
  12. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
  13. Chamarbagwala, Rubiana & Morán, Hilcías E., 2011. "The human capital consequences of civil war: Evidence from Guatemala," Journal of Development Economics, Elsevier, vol. 94(1), pages 41-61, January.
  14. Paul Collier & Anke Hoeffler & Dominic Rohner, 2006. "Beyond Greed and Grievance: Feasibility and Civil War," CSAE Working Paper Series 2006-10, Centre for the Study of African Economies, University of Oxford.
  15. Akresh, Richard & Verwimp, Philip & Bundervoet, Tom, 2007. "Civil war, crop failure, and child stunting in Rwanda," Policy Research Working Paper Series 4208, The World Bank.
  16. Tilman Brück & Patricia Justino & Philip Verwimp & Alexandra Avdeenko, 2010. "Identifying Conflict and Violence in Micro-Level Surveys," Economics of Security Working Paper Series 38, DIW Berlin, German Institute for Economic Research.
  17. Magnus Hatlebakk, 2007. "LSMS Data Quality in Maoist Influenced Areas of Nepal," CMI Working Papers 6, CMI (Chr. Michelsen Institute), Bergen, Norway.
  18. Eik Leong Swee, 2009. "On War and Schooling Attainment: The Case of Bosnia and Herzegovina," HiCN Working Papers 57, Households in Conflict Network.
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