Income and Livelihoods in the War in Afghanistan

Abstract

We explore the impact of the insurgency and military deployment on the livelihoods of local communities in Afghanistan. We use monthly wages and commodity prices at the provincial level over the period 2003–09 and look for their response to conflict events and ISAF deployment. Overall we find that prices are more sensitive to deployment than to attacks. Commodity prices are not significantly affected by insurgent violence, which is consistent with coping strategies already in place. On the opposite, military deployment is associated with an increase in the levels of wages and commodity prices, as ISAF is a new source of uncertainty.