The economic impact of violence in southern Chile

Cristián Larroulet Vignau and Jean P. Sepúlveda

Applied Economics, 2025, vol. 57, issue 54, 9203-9214

Abstract: For more than two decades, the Araucania region in southern Chile has been afflicted by violent acts related to the so-called Mapuche conflict. In this study, we ask what the region’s per capita GDP might have been if there had been no violence. To address this question, we establish 1997 as the starting point of the conflict and construct a counterfactual measure of Araucania’s per capita GDP using the synthetic control methodology. Our analysis indicates that the region’s per capita GDP has experienced an average decline of approximately US2.589 between 1998 and 2020 as a result of the violent conflict. This is a 22% decrease in comparison to the Araucania region’s anticipated GDP per capita.

Date: 2025
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DOI: 10.1080/00036846.2024.2409845

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