The Cost of Fear: The Welfare Effect of the Risk of Violence in Northern Uganda

Abstract

Although the effects of insecurity are believed to be important, these have never been directly measured. Previous estimates of the costs of conflict have only captured the joint effect of violence and insecurity. The distinction is important for understanding the origins of the costs and for policy design. Using the spatialtemporal variation in the placement of violence, I create spatially disaggregated measures of insecurity and present the first estimates of the relative causal contributions of the risk and experience of violence. The article also provides the first micro-data based counterpart to the cross-country literature on the costs of conflict.The effects of conflict and, more broadly, of violence on the development process are among the most important and, unfortunately, understudied areas in development economics. One in four people live in fragile and conflict-affected countries, or in countries with very high levels of violence; many more live in countries that recently emerged from conflict. These conditions substantially affect the development process as low income fragile or conflict-affected countries have not achieved a single Millennium Development Goal (MDG) (World Bank 2011).Despite these large and persistent costs, we have only a limited understanding of the origins of these costs, particularly the role of insecurity (i.e., the risk of violence) relative to that of direct exposure to violence. Since the majority of people in conflict and violence-prone countries do not experience violence directly, the near-exclusive focus of the literature on the experience of violence 1 ignores potentially significant losses due to the persistent insecurity and uncertainty. These potential effects of insecurity are largely obscured in current studies. The macroconflict literature finds substantial aggregate economic costs arising from conflict in terms of GDP per capita and GDP per capita growth but cannot explain the

How Traumatic Violence Permanently Changes Shopping Behavior

“…Traumatic experiences – such as wars, conflict environments, violent crimes, or natural disasters – can have a lasting impact on both physical and mental health ( McFarlane, 1986 ; Deahl et al, 2000 ). This is analogous to what has been shown to happen with veterans ( Elder et al, 1994 ; O’Donnell, 2000 ; Villa et al, 2002 ; Vogt et al, 2004 ) and it can influence such stress-related conditions such as post-traumatic stress disorder ( Neria et al, 2008 ; Updegraff et al, 2008 ), alcoholism, sense of fear ( Callen et al, 2014 ; Rockmore, forthcoming ) ( Richman et al, 2008 ), and alterations in personality traits ( Bramsen et al, 2002 ). What is not understood is how traumatic events might influence seemingly less dramatic – but still consequential – behaviors, such how these individuals spend money over the remainder of their life ( Rockmore, 2012 ).…”

“… 1 More broadly, war-related trauma has been found to affect risk aversion ( Voors et al, 2012 ; Callen et al, 2014 ), riskiness of livelihoods ( Rockmore, 2012 ; Arias et al, 2014 ) and general welfare ( Rockmore, forthcoming ). …”