Family Feuds: The Effect of Income Shocks on Domestic Violence Against Women Author: María Paula Medina Pulido Advisors: Stanislao Maldonado & Juan F. Vargas Thesis Master’s degree in Economics Department of Economics Universidad del Rosario Bogotá, Colombia May 2020 Family Feuds: The Effect of Income Shocks on Domestic Violence Against Women∗ María Paula Medina Pulido† May 2020 Abstract This paper studies the relationship between family income and domestic violence in a developing country. Todo so, I focus on municipalities of Colombia with high levels of coffee production. Using negative shocks to coffee prices as an exogenous source of variation that impacts coffee-producing household income, I find that municipalities with more intensive coffee production experience an increase in domestic violence against women as a consequence of a negative income shock. In order to test the potential mechanisms, I estimate different heterogeneous effects that depict under which situations the shock intensifies. Using data at the individual level, I find analogous effects of a negative income shock for rural women who live in a municipality marked by intensive coffee production. Also, I find that a woman who has decision-making power within the household has a lower probability of being a victim of domestic violence when her household faced this type of shocks. This last result suggests that female empowerment is a mechanism to reduce violence targeted against women. Keywords: domestic violence, income shocks, rural women, coffee production JEL codes: D13, J12, J16, Q02 ∗I would like to thank my advisors, Stanislao Maldonado and Juan F. Vargas, for their invaluable guidance during this research. I also want to thank the members of the thesis committee, Paul Rodríguez and Ana María Tribín, for their useful comments to enrich this document. I also thank the audience of the Micro Applied Workshop and Brown Bag Seminar at Universidad del Rosario. Finally, I am especially grateful to José Miguel Quintero and my family for their support and constant motivation throughout the process of this research. All errors remain my own. †Department of Economics, Universidad del Rosario. email: [email protected] 1 Disputas familiares: El efecto de choques al ingreso en la violencia doméstica contra las mujeres1 María Paula Medina Pulido2 Abstract Este documento estudia la relación entre ingresos familiares y violencia doméstica en un país en desarrollo. Para ello, me enfoco en los municipios de Colombia con altos niveles de producción de café. Utilizando choques negativos en los precios del café como una fuente de variación exógena que afecta los ingresos de hogares cafeteros, encuentro que los municipios con producción intensiva de café experimentan un aumento en los casos de violencia doméstica contra la mujer como consecuencia de un choque negativo en sus ingresos. Para analizar los mecanismos de este choque, estimo diferentes efectos heterogéneos que describen bajo qué situaciones se intensifica el choque. Utilizando datos a nivel individual, encuentro que el efecto se mueve en la misma dirección para el caso de las mujeres rurales que viven en un municipio con producción intensiva de café. Además, encuentro que una mujer que tiene poder de decisión dentro del hogar tiene una menor probabilidad de ser víctima de violencia doméstica cuando su hogar se enfrenta a este tipo de choques. Este último resultado sugiere que el empoderamiento de la mujer es un factor relevante para reducir la violencia dirigida contra las mujeres. Palabras clave: violencia doméstica, choques al ingreso, mujer rural, producción de café Códigos JEL: D13, J12, J16, Q02 1Me gustaría agradecer a mis asesores, Stanislao Maldonado y Juan F. Vargas, por su invaluable guía en el transcurso de esta investigación. Agradezco a los miembros del comité de tesis, Paul Rodríguez y Ana María Tribín, por sus excelentes comentarios para fortalecer este documento. También quiero agradecer a los asistentes del Taller de Microeconomía Aplicada y del Seminario de asistentes de investigación de la Universidad del Rosario. Por último, agradezco especialmente a José Miguel Quintero y a mi familia por su apoyo y motivación constante durante todo el proceso de esta investigación. Todos los errores son propios. 2Facultad de Economía, Universidad del Rosario. email: [email protected] 1 Introduction Violence against women is currently a topic of great relevance and global interest due to alarming rates and its strong implications for women’s personal development. Women who are victims of violence are likely to be immersed in an environment of gender-based discrimination and social norms that, together with gender stereotypes, perpetuate and drive such violence.1 Much of women’s exposure to violence is caused by conflicts that arise with their intimate partners. According to the World Health Organization (WHO), approximately one in three women who have been in an intimate partner relationship report that they have experienced some form of physical and/or sexual violence by an intimate partner during their lifetime. Similarly, 38% of murder cases where the victim was a woman were committed by her partner (WHO, 2013). On the other hand, men can also be victims of domestic violence (Randle and Graham, 2011). However, research suggests that men are much less likely to be physically harmed by women and less likely to report any case of violence (WHO, 2010; Williams et al., 2008). This unfavorable situation for women makes the study of the main determinants of the violence that they face relevant when designing policies that aim to eradicating this behavior. To understand these determinants, the most widely used model of violence against women is the ecological model, which proposes that violence is a result of factors operating at four levels: individual, intimate partner relationship, community, and societal (Heise, 1998; WHO, 2012). In order to characterize the environments and determinants that increase the probability of facing an act of domestic violence, I focus on the designated levels. First, in the interest of analyzing the case of a vulnerable population, I concentrate on rural households in a developing country. Rural households are characterized by living with reduced economic opportunities. Second, I analyze income shocks faced by these households over a certain period as one of the determinants of domestic violence. Third, I emphasize the possible heterogeneous effects that would occur in places with unfavorable labor conditions for women, and in households where women do not have decision-making power. This paper focuses on Colombia, where the rate of domestic violence is one of the highest in Latin America.2 Also, it focuses on income shocks faced by the Colombian coffee-producing population since coffee price fluctuations have a direct effect on the income of these households (FNC, 2014).3 I examine the coffee sector since in Colombia, coffee cultivation is not confined to a particular region and approximately 58% of Colombian municipalities produce coffee (Ministry of Agriculture, 2007). In other words, Colombia has sufficient variation in coffee production levels across municipalities (See Figure3, Appendix). As the labor force participation in the Colombian coffee sector is mainly supplied by men (Figure2), I focus on the effect of an income shock faced more by men. 1UN Women. Focusing on prevention to stop the violence. www.unwomen.org/en/what-we-do/ending-violence-against-women/ prevention 2According to the Gender Equality Observatory of the Economic Commission for Latin America and the Caribbean, Colombia has the fifth highest number of femicides in the region, behind Honduras, Guatemala, the Dominican Republic, and El Salvador. 3The Colombian coffee-producing population is mostly poor, has become old, has few years of education, and moves in a predominantly informal labor market (Echavarría et al., 2015). 3 In my empirical strategy, I use coffee price shocks as an exogenous source of variation concerning household income in coffee-intensive areas.4 I interact the internal coffee price with a coffee production variable in order to differentiate the effect of an income shock on domestic violence in households located in coffee producing municipalities of different production intensities. For robustness, I also estimate an Instrumental Variables approach in order to address the possible endogeneity of the internal coffee price paid to growers. Using this specification, I instrument the internal coffee price with the total coffee exports of the three worldwide coffee producers without Colombia. Moreover, taking advantage of two sources of domestic violence data, I analyze both municipality and individual- level cases. Using municipality-level data, I find that municipalities with more intensive coffee production experience an increase in domestic violence as a consequence of a decrease in the coffee price paid to growers. Using individual-level data, I find analogous effects of a negative income shock for rural women who live in a municipality marked by intensive coffee production. What is the mechanism that causes household income to increase or decrease levels of domestic violence? I link the transmission channel with the direct effect that coffee price fluctuations have on household income in the case of coffee-producing households (FNC, 2014). On the one hand, a positive income shock could lead to favorable household conditions and, as a consequence, the likelihood of facing an act of domestic violence decreases