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The Opportunity Cost of Conflict: Statistically Comparing Israel and Synthetic Israel

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  • Horiuchi, Yusaku
  • Mayerson, Asher

Abstract

What would Israel’s economy have looked like without the 2000 Palestinian Intifada? This article examines this counterfactual question by statistically comparing the economic growth trajectories of Israel and a “synthetic” Israel, which is constructed by applying a method proposed by Abadie and Gardeazabal (2003) and Abadie, Diamond and Hainmueller (2010, 2014). The results of the analysis suggest that Israel’s per capita gross domestic product during the Second Intifada was reduced by an average of about $2,003 per year (in 2005 US dollars). This amounts to about 8.6 percent of the 2000 baseline level. In the case of the Second Intifada, the opportunity cost of conflict was indeed substantial and significant.

Suggested Citation

  • Horiuchi, Yusaku & Mayerson, Asher, 2015. "The Opportunity Cost of Conflict: Statistically Comparing Israel and Synthetic Israel," Political Science Research and Methods, Cambridge University Press, vol. 3(3), pages 609-618, September.
    • Handle: RePEc:cup:pscirm:v:3:y:2015:i:03:p:609-618_00
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    Cited by:

    1. Aleksandar Kešeljević & Rok Spruk, 2024. "Estimating the effects of Syrian civil war," Empirical Economics, Springer, vol. 66(2), pages 671-703, February.
    2. Julia Bluszcz & Marica Valente, 2022. "The Economic Costs of Hybrid Wars: The Case of Ukraine," Defence and Peace Economics, Taylor & Francis Journals, vol. 33(1), pages 1-25, January.
    3. Alou Adessé Dama, 2021. "Exploring Tilly’s Theory : Violent Conflicts and Tax Revenue in Sub-Saharan Africa," CERDI Working papers hal-03401539, HAL.
    4. Rohan Best & Paul J. Burke, 2019. "Macroeconomic impacts of the 2010 earthquake in Haiti," Empirical Economics, Springer, vol. 56(5), pages 1647-1681, May.
    5. Matias D. Cattaneo & Yingjie Feng & Rocio Titiunik, 2021. "Prediction Intervals for Synthetic Control Methods," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1865-1880, October.
    6. Mohammad Reza Farzanegan, 2019. "The Opportunity Cost of the Islamic Revolution and War for Iran," MAGKS Papers on Economics 201929, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. Firat Bilgel & Burhan Can Karahasan, 2019. "Thirty Years of Conflict and Economic Growth in Turkey: A Synthetic Control Approach," Defence and Peace Economics, Taylor & Francis Journals, vol. 30(5), pages 609-631, July.
    8. Mohammad Reza Farzanegan & Sven Fischer, 2023. "The Impact of a Large-Scale Natural Disaster on Local Economic Activity: Evidence from the 2003 Bam Earthquake in Iran," CESifo Working Paper Series 10502, CESifo.
    9. Cruz A. Echevarría & Javier García-Enríquez, 2020. "The economic cost of the Arab Spring: the case of the Egyptian revolution," Empirical Economics, Springer, vol. 59(3), pages 1453-1477, September.
    10. Julia Bluszcz & Marica Valente, 2019. "The War in Europe: Economic Costs of the Ukrainian Conflict," Discussion Papers of DIW Berlin 1804, DIW Berlin, German Institute for Economic Research.

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