Unexpected guests: The impact of internal displacement inflows on rental prices in Colombian host cities

We study the causal impact of internally displaced people (IDP) inflows on rental prices in Colombian host cities. Following an instrumental variables approach we find that as IDP inflows increase, low-income rental prices increase and high-income rental prices decrease. We provide empirical evidence on two potential mechanisms for these findings: Excess demand for low-income housing puts upwards pressure on rental prices; increasing supply of high-income housing coupled with rising homicide rates put downwards pressure on rental prices.