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

Timothy Besley and Hannes Mueller

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

JEL-codes: D74 O16 P16 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2009-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://eprints.lse.ac.uk/25427/ Open access version. (application/pdf)

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 HousePrices 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:ehl:lserod:25427

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