Civil Conflict and Forced Migration : The Microdeterminants and the Welfare Losses of Displacement in Colombia

During the last decade, forced internal displacement in Colombia has been a growing phenomenon closely linked to the escalation of the internal armed conflict, particularly in rural areas. The displacement problem has affected nearly every region and vulnerable groups of the population. Two emerging policy questions are whether the magnitude of the response to this problem has been proportional to its size and to what extent the instruments chosen are the most adequate to address it. The purpose of this paper is twofold. First, to identify the determinants of displacement behavior and to compare these findings with standard migration literature. Second, to estimate the burden or welfare losses of displacement. Empirical evidence shows that the welfare loss of displacement is considerable and amount to 37 percent of the net present value of rural lifetime aggregate consumption for the average household. This loss is estimated for each household with a method that derives welfare changes from behavioral model estimates, widely used in environmental economics. Our empirical findings also show that the level of violence at the origin site is not only the dominant factor of displacement behavior, but also that in a violent environment other migration determinants have the opposite effect, relative to the one expected by the migration literature in a non-violent context. That is, the violent environment modifies the migration incentives for risk aversion, access to information, the planning horizon, and location-specific assets, human and non-human