Conflict and farmland values: Spatial panel data evidence from rice plots in Myanmar

The significant economic implications of the value of farmland in developing countries is increasingly recognized, particularly in those countries where land scarcity is a growing problem. However, knowledge gaps remain about how farmland values can be affected by factors such as conflict and social instability. A knowledge gap also remains regarding how spatial transmission and feedback effects of land values among geographically proximate parcels may affect the relationship between conflict and farmland values. This impact has generally been overlooked in the literature, despite the well-established importance of clustering in agricultural economies. This paper addresses these gaps by utilizing unique, nationally representative panel data on farm households and spatial data on conflict intensity in Myanmar, with a focus on the period of significant conflict intensification following the 2021 political crisis, particularly in 2022 and 2023, when the country’s conflict level largely shifted to a high-intensity state. We apply spatial econometric models and their extensions to a panel data framework, as well as models that allow for endogenous spatial weights, which enable conflicts to not only affect farmland values but also shape how changes in farmland values transmit across locations. Our results indicate that more local conflict during the prior 12 months, measured by the number of months with at least one fatal violent event within the township of respondents, significantly reduced the farmland values of the largest rice plot of these respondents. Specifically, in the monsoon and non-monsoon harvesting seasons of 2022 and 2023, an additional one month of fatal violence was associated with approximately 3 percent and 5 percent decline in land values, respectively, implying a potentially sizable decline for townships that experience more persistent conflicts over several months. Moreover, the effects of violent events are magnified by spatial spillover effects on land values across village tracts. These adverse effects are robust and consistent across a range of methodologies and hold across diverse agroecological conditions.