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The economic impact of violence in LAC: implications for the EU

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Violence and the fear of violence create, inter alia, significant economic disruptions. While violent incidents incur costs in the form of property damage, physical injury or psychological trauma, fear of violence alters economic behaviour, primarily by perturbing consumer patterns but also in diverting public and private resources away from productive activities and towards protective measures.

Combined, they generate significant welfare losses in the form of productivity shortfalls, foregone earnings and distorted expenditure – all of which affect the price of goods and services. Measuring the scale and cost of violence has, therefore, important implications for assessing the effects it has on economic activity.