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We investigate the effect of inequality, measured by Gini and Polarization indices, on the level of Nepals conflicts due to Maoist's People's War using rational choice theory. The number of people killed by Maoist rebels during 1996-2003 in each Nepalese village is modeled as count data at the village level, with heterogeneity across villages in each district. We find strong evidence that greater inequality escalates deadly violence; the presence of social network and the government welfare programs may reduce it; and the level of income is unrelated to conflict but may mitigate effect of inequality on conflict. The inequality variables themselves have distinct effects. Polarization appears to be a more resilient inequality that causes conflict.'