agricultural markets (Anderson et al., 2008) – to capture the propensity of governments to absorb international commodity price shocks via policy measures. Such measures may dampen the effects of commodity price shocks on conflict (Carter and Bates, 2012).

# **5. Results**

We start by analyzing the determinants of conflict onset. Table 2 presents the results of the estimation of equation (5). The first four columns use _any_ conflict onset as the dependent variable. To make our results comparable with previous studies column (1) includes only the export price index _Px_ as the independent variable (along with the control variables and country and year effects). The sum of the contemporaneous and lagged coefficients is positive and significant; the effect is mainly driven by the contemporaneous price variable. Conditional on the changes in _Px_ at _t-1_ and _t-2_ , a one standard deviation increase in the export price index raises the probability of conflict by 4 percent in the same year. The signs of the lagged coefficients are consistent with the negative autocorrelation of commodity prices (i.e. the coefficient on _Px(t-1)_ is negative and that on _Px(t-2)_ is positive). Importantly, the sum of the three _Px_ coefficients is positive and significant. It suggests that an increase of 10% in _Px_ raises the risk of conflict by 2.2 percentage points.

Having had a past conflict (since 1946) raises the probability of conflict by 18%, which confirms the findings in World Bank (2011). On the other hand the presence of a major conflict in the neighboring countries the year before does not affect the conflict probability in the country of interest (columns 2-4).

Adding the other trade variables does not affect the size of either the contemporaneous _Px_ coefficient or the sum of the three _Px_ coefficients (contemporaneous plus two lags), which remain positive and significant (column 2). The other trade variables are not significant at the standard levels. The sums of the contemporaneous and lagged coefficients on _Pm_ and on _MP_ are both very close to zero, with their contemporaneous coefficients having the expected sign (positive for _Pm_ and negative for _MP_ ). The share of trade with neighbors is negative but not significant. The results do not change when including a dummy for the incidence of a coup attempt in the preceding two years (column 3).

The positive and significant effect of _Px_ on conflict contradicts the finding in the similar equation from B-B, where the coefficient on the commodity price index was not significant.<sup>27</sup> As the estimation strategy and the data are comparable, this difference has to do with the different way the price index is computed, i.e. using prices in levels as opposed to changes. Indeed when we compute _Px_ using price changes, its contemporaneous coefficient becomes less significant and their sum becomes not

> 27 Our result is also different from the negative coefficient of Brückner and Ciccone (2010). However our specification is not comparable to theirs, as we run the regressions for onset and ending separately on split samples as in B-B. In addition we also use the log of price level instead of price change.

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