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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.

Suggested Citation

  • Gardeazabal, Javier, 2010. "Methods for Measuring Aggregate Costs of Conflict," DFAEII Working Papers 1988-088X, University of the Basque Country - Department of Foundations of Economic Analysis II.
    • Handle: RePEc:ehu:dfaeii:6468
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    3. Iyer, Lakshmi & Santos, Indhira, 2012. "Creating jobs in South Asia's conflict zones," Policy Research Working Paper Series 6104, The World Bank.
    4. Stergios Skaperdas, 2011. "The costs of organized violence: a review of the evidence," Economics of Governance, Springer, vol. 12(1), pages 1-23, March.
    5. Ksenia Dishkant, 2023. "Bilateral Trade and Strategic Rivalry," Academicus International Scientific Journal, Entrepreneurship Training Center Albania, issue 28, pages 142-168, July.
    6. Leonardo Peñaloza Pacheco, 2019. "Living with the Neighbors: The Effect of Venezuelan Forced Migration on Wages in Colombia," CEDLAS, Working Papers 0248, CEDLAS, Universidad Nacional de La Plata.
    7. Artem Kochnev, 2021. "Marching to Good Laws: The Impact of War, Politics, and International Credit on Reforms in Ukraine," wiiw Working Papers 192, The Vienna Institute for International Economic Studies, wiiw.
    8. Vincenzo Bove & Leandro Eliay & Ron P Smith, 2014. "The relationship between panel and synthetic control estimators of the effect of civil war," BCAM Working Papers 1406, Birkbeck Centre for Applied Macroeconomics.
    9. Julia Bluszcz & Marica Valente, 2019. "The War in Europe: Economic Costs of the Ukrainian Conflict," Discussion Papers of DIW Berlin 1804, DIW Berlin, German Institute for Economic Research.

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