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Estimating the Peace Dividend: The Impact of Violence on House Prices in Northern Ireland

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  • Timothy Besley
  • Hannes Mueller

Abstract

This article exploits data on the pattern of violence across regions and over time to estimate the impact of the peace process in Northern Ireland on house prices. After establishing a negative correlation between killings and house prices, we estimate the parameters of a Markov switching model with conflict and peace as latent states. We use the model to estimate the size of the peace dividend as captured in house price changes. (JEL D74, R23, R31)

Suggested Citation

  • Timothy Besley & Hannes Mueller, 2012. "Estimating the Peace Dividend: The Impact of Violence on House Prices in Northern Ireland," American Economic Review, American Economic Association, vol. 102(2), pages 810-833, April.
  • Handle: RePEc:aea:aecrev:v:102:y:2012:i:2:p:810-33
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    More about this item

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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