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Estimating the peace dividend: the impact of violence on house prices in Northern Ireland

Besley, Timothy and Mueller, Hannes (2009) Estimating the peace dividend: the impact of violence on house prices in Northern Ireland. Economic Organisation and Public Policy Discussion Papers, EOPP 11. Suntory Centre, London School of Economics and Political Science, London, UK.

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Abstract

This paper 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. We begin with a linear model that estimates the average treatment effect of a conflictrelated killing on house prices - showing a negative correlation between house prices and killings. We then develop an approach based on an economic model where the parameters of the statistical process are estimated for a Markov switching model where conflict and peace are treated as a latent state. From this, we are able to construct a measure of the discounted number of killings which is updated in the light of actual killings. This model naturally suggests a heterogeneous effect of killings across space and time which we use to generate estimates of the peace dividend. The economic model suggests a somewhat different pattern of estimates to the linear model. We also show that there is some evidence of spillover effects of violence in adjacent regions.

Item Type: Monograph (Working Paper)
Official URL: http://sticerd.lse.ac.uk/_new/publications/series....
Additional Information: © 2009 the authors
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Journal of Economic Literature Classification System: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict; Conflict Resolution; Alliances
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy
Sets: Collections > Economists Online
Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: EOPP 11
Date Deposited: 07 Oct 2009 16:30
URL: http://eprints.lse.ac.uk/25427/

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