O.A.M.D.G.

|**Dependent variable is Savings Rate**|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|**Model**|||Tobit||||||OLS||||
|**Income definition**|(1)||(1)||(2)||(1)||(1)||(2)||
||**Coeff**|**z-stat**|**Coeff**|**z-stat**|**Coeff**|**z-stat**|**Coeff**|**z-stat**|**Coeff**|**z-stat**|**Coeff**|**z-stat**|
|_Violence_|||||||||||||
|public order problem|-0.530|-0.96|0.150|0.65|0.467|1.41|-0.556|-1.01|0.151|0.66|0.464|1.39|
|<br>guerrilla attack rate|-0.419<br>**|-2.18|-0.122<br>***|-3.19|-0.270<br>***|-3.32|-0.424<br>**|-2.25|-0.123<br>**|*<br>-3.17|-0.270<br>***|-3.29|
|(guerrilla attack rate)2|0.017<br>*|1.78|0.007<br>***|3.50|0.016<br>***|3.75|0.018<br>*|1.85|0.007<br>**|*<br>3.50|0.016<br>***|3.74|
|homicide rate|0.031<br>***|2.63|0.001|0.37|-0.004|-0.80|0.031<br>***|2.65|0.001|0.36|-0.004|-0.83|
|(homicide rate)2|-1.17E-04 **|-2.18|9.98E-07|0.08|7.29E-06|0.27|-1.19E-04 **|-2.20|1.30E-06|0.10|7.94E-06|0.29|
|_Municipality controls_|||||||||||||
|<br>grouped settlement|-0.180|-0.35|-0.287<br>***|-4.20|-0.406<br>**|-2.13|-0.135|-0.26|-0.291<br>**|*<br>-4.22|-0.408<br>**|-2.13|
|rural sparse settlement|0.496|0.86|-0.059|-0.52|-0.062|-0.24|0.474|0.84|-0.059|-0.52|-0.067|-0.26|
|Oriental Region|-0.860|-1.09|0.177|1.00|0.745<br>**|2.49|-0.778|-1.00|0.181|1.02|0.757<br>***|2.51|
|Central Region<br>|-0.786<br>|-0.53|0.467<br>|1.42|0.737<br>*<br><br>|1.64|-0.843<br>|-0.57|0.464<br>|1.40|0.737<br>*<br>|1.64|
|Pacific Region|-0.386|-0.37|0.051|0.19|-0.800<br>*|-1.80|-0.478|-0.45|0.046|0.17|-0.809<br>*|-1.81|
|<br>altitude|-0.001|-0.66|-0.0004|-0.86|-0.0007|-0.90|-0.001|-0.61|-0.0004|-0.85|-0.001|-0.88|
|altitude2|4.29E-07|0.89|9.00E-08|0.45|6.98E-08|0.21|3.95E-07|0.81|9.06E-08|0.45|6.88E-08|0.21|
|percentage of people lowest 2 strata|3.497<br>***|2.90|0.185|0.65|0.209|0.38|3.403<br>***|2.82|0.185|0.64|0.197|0.36|
|index of quality of life|-0.232<br>*|-1.76|0.030|0.83|0.109<br>*|1.64|-0.236<br>*|-1.79|0.029|0.81|0.108<br>*|1.62|
|<br>capture rate|-0.001|-1.00|-1.80E-05|-0.11|2.55E-04|0.75|-0.001|-0.95|-1.79E-05|-0.11|2.58E-04|0.75|
|_Household/ head variables_|||||||||||||
|age|0.187|1.28|0.007|0.55|-0.006|-0.23|0.179|1.21|0.007|0.53|-0.006|-0.21|
|age2|-0.002|-1.34|3.19E-05|0.22|-0.0004|-1.25|-0.002|-1.27|3.32E-05|0.23|-4.29E-04|-1.26|
|married|0.571<br>**|2.28|-0.050|-0.69|-0.478<br>***|-3.26|0.600<br>**|2.41|-0.051|-0.70|-0.482<br>***|-3.29|
|female|-4.556<br>***|-6.03|-0.831<br>***|-7.45|-2.450<br>***|-9.19|-4.403<br>***|-5.77|-0.831<br>**|*<br>-7.32|-2.455<br>***|-9.10|
|some or complete primary education|1.046<br>**|2.07|-0.072|-1.09|-0.014|-0.08|0.991<br>*|1.91|-0.075|-1.11|-0.015|-0.09|
|some secondary or more education|0.562|0.85|-0.049|-0.60|0.271<br>*|1.48|0.491|0.73|-0.052|-0.64|0.268<br>*|1.46|
|Inverted Mills Ratio|||||||3.536|1.27|0.058|0.05|0.403|0.22|
|constant|-1.918|-0.34|-1.544<br>*|-1.49|-3.727<br>**|-1.98|-7.012|-1.02|-1.599|-0.66|-4.308|-1.10|
|_Wald tests_|||||||||||||
|Inverted Mills Ratio|||||||0.21||0.96||0.83||
|guerrilla attack rate (p-value)|0.03||0||0||0.03||0.02||0.002||
|guerrilla attack rate2 (p-value)|0.08||0||0||0.07||0.01||0.0003||
|homicide rate (p-value)|0.01||0.71||0.42||0.01||0.72||0.41||
|<br>homicide rate2 (p-value)|0.03||0.94||0.79||0.03||0.92||0.77||
|violence variables (p value)|0.02||0.03||0||0.03||0.03||0.01||
|welfare indicators (p value)|0.002||0.64||0.25||0.003||0.65||0.26||
|access of the state (p value)|0.28||0||0||0.42||0.0002||0.03||
|Adj R2|||||||0.03||0.02||0.06||
|Lo likelihood<br>|-3036660||-1443036||-1825363||||||||
|g<br> <br>Number of obs|,.<br>7500||.<br>6,173||.<br>6173||7386||6,140||6,136||
|Sample|all||waged only||waged only||all||<br>waged only||<br>waged only||

# Results-Table 2: Coefficient estimates from clustered Tobit and OLS regressions of the savings rate of Colombian households

_Note: Dependent variable is the savings rate calculated as (income – consumption) as a % of income, regression models are Tobit and OLS as indicated. Income definition (1) is salary + estimated asset income, income definition (2) is salary only. Columns 1 and 2 come from a dull sample, columns 3-5 come from a sample with waged people only. Standard errors are robust, adjusted for clustering on municipality. Default household education level is ‘none’. Default region is Atlantic, default rurality degree is ‘urban’. Stars mark significance at the 10% (*), 5% (**) and 1% (***) levels._ _The Wald-tests (chi2 for Tobit, F for OLS) examine first whether simple or squared terms of the two main violence variables can be excluded, and then the joint significance of groups of variables in both specifications, in this order of the violence variables: public order problem, attack rate, homicide rate; of the welfare indicators: the index of quality of life and the share of population in the lowest two income sixtiles; of the variables indicating access of the state: rurality, region, altitude and capture rate, respectively._ We see that the results are consistent with our framework. Guerrilla attacks enter significantly, in the simple and the quadratic term, both of which should not be excluded (Wald-Test p between 0 and 0.07)<sup>20</sup> . This result is robust to different income definitions,

> 20 Note that Brück (1997) finds that the impact of violence on savings depends on the duration of the conflict. A shock perceived as temporary will cause dissaving, whereas a longer term impact may leave the savings rate unaltered.