Does violence have any financial effects? In order
to answer this question, it is useful to consider if
violence has an economic shock. Just like any
typical adverse shock, violence can have an economic
impact if it induces uncertainty in a region and
consequently decreases investment opportunities in
the affected area. The act of violence explored in
this study is the 1998 bombing that occurred in
Coimbatore, India, as a result of religious tension
between the Hindu and Muslim communities. The
vehicle of analysis is a bidding Rosca (chit fund),
and the outcomes explored are arrear rates and
winning bids. More specifically, this paper aims to
determine whether individuals in Roscas affected by
the bomb blasts have higher arrear rates and more
volatile winning bids compared to participants in
the unaffected Roscas.
to answer this question, it is useful to consider if
violence has an economic shock. Just like any
typical adverse shock, violence can have an economic
impact if it induces uncertainty in a region and
consequently decreases investment opportunities in
the affected area. The act of violence explored in
this study is the 1998 bombing that occurred in
Coimbatore, India, as a result of religious tension
between the Hindu and Muslim communities. The
vehicle of analysis is a bidding Rosca (chit fund),
and the outcomes explored are arrear rates and
winning bids. More specifically, this paper aims to
determine whether individuals in Roscas affected by
the bomb blasts have higher arrear rates and more
volatile winning bids compared to participants in
the unaffected Roscas.