The Economic Welfare Cost of Conflict: An Empirical Assessment

Gregory D. Hess ()

Claremont Colleges Working Papers from Claremont Colleges

Abstract: War, whether external or internal, large or small, is a costly endeavor. Loss of life, loss of close friends or family, and the destruction of material possessions all play a part in the costs of war. The purpose of this paper is to capture only the material, economic welfare costs of conflict stemming from the altered path of consumption resulting from conflict. As such, our measure is quite a lower bound for the true and more encompassing welfare loss from living in a non-peaceful world. Remarkably, however, even these pure economic welfare losses from conflict are large. We find that, on average, individuals would give up over 8 percent of their current level of consumption to live in a peaceful world. Such large potential welfare gains from reducing warfare should make economists and policy-makers take note.

Keywords: Growth; Conflict; Welfare Costs (search for similar items in EconPapers)
JEL-codes: E21 E32 H56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2002-07
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Working Paper: The Economic Welfare Cost of Conflict: An Empirical Assessment (2003)
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Persistent link: http://EconPapers.repec.org/RePEc:clm:clmeco:2002-08

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