This paper explores how commodity price shocks in the international market affect armed conflict. Using a new dataset on civil war in Colombia, the authors find that exogenous price shocks in the coffee and oil markets affect conflict in opposite directions, and through separate channels. A sharp fall in coffee prices during the late 1990s increased violence disproportionately in coffee-intensive municipalities, by lowering wages and the opportunity cost of recruitment into armed groups. In contrast, a rise in oil prices increased conflict in the oil region, by expanding local government budgets and raising potential gains from rapacity and predation on these resources. The paper adds to the current literature in three ways: first, by using a detailed dataset on political violence to conduct a within-country analysis of civil war, which enables the identification of the impact of economic shocks. Second, by proposing a simple framework for understanding these results, modifying a model developed by Dal Bó and Dal Bó (2006) to predict that higher commodity prices can either raise or lower conflict depending on the factor intensity of the production technology. Third, by testing for these channels by empirically assessing the relative importance of the opportunity cost and rapacity mechanisms in the case of coffee and oil. The paper finds that the price of labor-intensive goods affects conflict primarily through the opportunity cost effect, while the price of capital-intensive goods affects conflict through the rapacity channel. The results show that a drop in coffee prices increased civil war violence in coffee-intensive municipalities, while a rise in oil prices increased conflict in the oil region. The paper also shows that the rise in oil prices did not alter government attacks or police allocation, which establishes that conflict escalation in the oil region did not stem from increased state efforts to pursue rebel groups. The paper concludes that the price of labor-intensive goods affects conflict primarily through the opportunity cost effect, while the price of capital-intensive goods affects conflict through the rapacity channel.This paper explores how commodity price shocks in the international market affect armed conflict. Using a new dataset on civil war in Colombia, the authors find that exogenous price shocks in the coffee and oil markets affect conflict in opposite directions, and through separate channels. A sharp fall in coffee prices during the late 1990s increased violence disproportionately in coffee-intensive municipalities, by lowering wages and the opportunity cost of recruitment into armed groups. In contrast, a rise in oil prices increased conflict in the oil region, by expanding local government budgets and raising potential gains from rapacity and predation on these resources. The paper adds to the current literature in three ways: first, by using a detailed dataset on political violence to conduct a within-country analysis of civil war, which enables the identification of the impact of economic shocks. Second, by proposing a simple framework for understanding these results, modifying a model developed by Dal Bó and Dal Bó (2006) to predict that higher commodity prices can either raise or lower conflict depending on the factor intensity of the production technology. Third, by testing for these channels by empirically assessing the relative importance of the opportunity cost and rapacity mechanisms in the case of coffee and oil. The paper finds that the price of labor-intensive goods affects conflict primarily through the opportunity cost effect, while the price of capital-intensive goods affects conflict through the rapacity channel. The results show that a drop in coffee prices increased civil war violence in coffee-intensive municipalities, while a rise in oil prices increased conflict in the oil region. The paper also shows that the rise in oil prices did not alter government attacks or police allocation, which establishes that conflict escalation in the oil region did not stem from increased state efforts to pursue rebel groups. The paper concludes that the price of labor-intensive goods affects conflict primarily through the opportunity cost effect, while the price of capital-intensive goods affects conflict through the rapacity channel.