Economic Fallout of Social Conflict: Evidence from Social Media and Satellite Images
Summary — This paper examines the impact of rising social conflict and political instability in Haiti on economic activity. It uses data from Facebook and satellite imagery to show that violence reduces economic activity in the short and medium term, with limited recovery after violent events.
Key Findings
- Violent events reduce economic activity by approximately 3.1% in the short term.
- Political or civil events are associated with a decline of approximately 1.5% and 2.5% in economic activity over the subsequent five-month period.
- Home services and professional services are the sectors most impacted by rising insecurity.
- An additional violent event is associated with a 1% decline in economic activity one year following the event.
- Limited recovery after violent events.
Full Description
This paper investigates the economic consequences of social conflict and political instability in Haiti, leveraging a quasi-experimental design and innovative data sources. By exploiting geographical heterogeneity and using data from Facebook and satellite imagery, the study demonstrates the impact of different types of violence on economic activity. The findings indicate that one additional violent event reduces economic activity by approximately 3.1% in the short term. In the medium term, an additional political or civil event is associated with a decline of approximately 1.5% and 2.5%, respectively. The analysis also reveals that the sectors most impacted by rising insecurity are home services and professional services, with limited recovery observed after violent events.