# 1. Introduction

This paper examines the effects of conflicts, economic shocks, and death on depression, and investigates whether depression and adverse events interfere with productive activities and future investment. According to WHO’s estimation, depressive disorders are a leading cause of disability, affecting 350 million people worldwide.<sup>1</sup> Lack of recognition and access to treatment for depression and anxiety result in an estimated economic loss of a trillion US dollars every year (Chisholm, Sweeny et al. 2016).

Stressful life events are often associated with an increased probability of depressive disorder. Studies have found economic shocks <mark>(Das, Do et al. 2009),</mark> paternal loss (Nickerson et al. 2013) and loss of a child (Rosenberg, A. R. et al. 2012) lead to increased likelihood of becoming depressed. Recent studies report political conflict and associated violence have increased the risk of depression in conflict prone areas such as West Bank and Gaza, Colombia, Sri Lanka, West Papua and Georgia (Canetti, Galea et al. 2010, Richards, Ospina-Duque et al. 2011, Senarath, Wickramage et al. 2014, Tay, Rees et al. 2015, Saxon, Makhashvili et al. 2017). While these studies call attention to the impacts of political conflict and violence on mental health, little is still known about their implications on behavior and decision making among people who are affected by conflict as well as estimated economic costs of depression. This paper shows that while experiences of both conflicts and other shocks are associated with self-reported depressive symptoms, the experience of conflict has the largest and strongest relationship with self-reported depression in Nigeria. Experiencing conflict has the same effect on mental health as a reduction in income by US $52.27. We also explore the story that depression and adverse events interfere with productive activities and future investment through lower employment and educational investment.

This paper focuses on Nigeria because the country has been severely impacted by both conflict and economic shocks. In recent years, Nigeria has suffered from security crises caused by conflicts between ethnic groups, farmers, and herdsmen. Some of the more egregious incidents have been committed by Boko Haram, which is responsible for terrorist attacks including the abduction of more than 200 schoolgirls in 2014, and an estimated 20,000 deaths and at least two million displacements.<sup>2</sup> There is also concurrent violence in other regions in the country. Economic and weather-related shocks are also common throughout Nigeria. Recent changes in climate are responsible for the increased frequency of droughts (Abubakar and Yamusa 2013, Shiru, Shahid et al. 2018).

From February to April 2016, the Nigeria National Bureau of Statistics, with the support of the World Bank, conducted the third wave of the nationally-representative household survey called the General Household Survey-Panel (GHS-Panel). Data were collected from about 4,600 households on consumption, income, depression (via a version of the Center for Epidemiological Studies-Depression or CES-D test), family history of conflicts, deaths, weather and economic shocks.<sup>3</sup> In addition, the survey randomized the order of modules in a priming survey experiment:

> 1 http://www.who.int/news-room/detail/30-03-2017--depression-let-s-talk-says-who-as-depression-tops-list-ofcauses-of-ill-health

> 2 https://www.bbc.com/news/world-africa-42735414

> 3 The survey questionnaire also included questions on basic preferences (e.g., risk, time discounting, and trust).

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