Estimating the Peace Dividend:The Impact of Violence on HousePrices in Northern Ireland

Timothy Besley and Hannes Mueller

STICERD - Economic Organisation and Public Policy Discussion Papers Series from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: This paper exploits data on the pattern of violence across regions and over time toestimate the impact of the peace process in Northern Ireland on house prices. Webegin with a linear model that estimates the average treatment effect of a conflictrelatedkilling on house prices - showing a negative correlation between house pricesand killings. We then develop an approach based on an economic model where theparameters of the statistical process are estimated for a Markov switching modelwhere conflict and peace are treated as a latent state. From this, we are able toconstruct a measure of the discounted number of killings which is updated in thelight of actual killings. This model naturally suggests a heterogeneous effect ofkillings across space and time which we use to generate estimates of the peacedividend. The economic model suggests a somewhat different pattern of estimates tothe linear model. We also show that there is some evidence of spillover effects ofviolence in adjacent regions.

Keywords: Peace Dividend; Northern Ireland; Conflict; Housing Price; Markov Chain (search for similar items in EconPapers)
JEL-codes: D74 P16 (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Estimating the Peace Dividend: The Impact of Violence on House Prices in Northern Ireland (2012)
Working Paper: Estimating the peace dividend: the impact of violence on house prices in Northern Ireland (2009)
Working Paper: Estimating the peace dividend: the impact of violence on house prices in Northern Ireland (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:stieop:011

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