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« March 5, 2012 | Main | March 19, 2012 »

6 March 2012

Rainfall: not such a great instrument after all...

Every discovery of a plausible instrumental variable sparks a cottage industry of papers all using the same instrument to ask different questions. A working paper by Heather Sarsons, titled "Rainfall and Conflict" calls one of these cottage industries into serious question. From the abstract:

Starting with Miguel, Satyanath, and Sergenti (2004), a large literature has used rainfall variation as an instrument to study the impacts of income shocks on civil war and conflict. These studies argue that in agriculturally-dependent regions, negative rain shocks lower income levels, which in turn incites violence. This identiĀ…cation strategy relies on the assumption that rainfall shocks affect conflict only through their impacts on income. I evaluate this exclusion restriction by identifying districts that are downstream from dams in India. In downstream districts, income is much less sensitive to rainfall fluctuations. However, rain shocks remain equally strong predictors of riot incidence in these districts. These results suggest that rainfall affects rioting through a channel other than income and cast doubt on the conclusion that income shocks incite riots.

It's a short, readable paper -- worth checking out if you're into this kind of thing.

Posted by Richard Nielsen at 7:56 PM