Conflict and the ethnic structure of the marketplace: Evidence from Israel

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Abstract

How and why does ethnic conflict affect the ethnic structure of the marketplace? To answer these questions, this paper merges a unique administrative dataset covering the universe of transactions in the Israeli market for used cars during 1998–2010 with data on the intensity of the Israeli-Palestinian conflict. The analysis shows that violence reduces the number of transactions between Arab sellers and Jewish buyers while increasing the number of transactions between Arab sellers and Arab buyers; violence has no effect on the number of transactions involving Jewish sellers. I relate these findings to the economic literature studying the sources of discrimination.

Original languageAmerican English
Pages (from-to)134-145
Number of pages12
JournalEuropean Economic Review
Volume90
DOIs
StatePublished - 1 Nov 2016

Bibliographical note

Publisher Copyright:
© 2016 Elsevier B.V.

Keywords

  • Conflict
  • Discrimination
  • Ethnicity
  • Israel
  • Market for used cars

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