Abstract
Economic studies that empirically explore the connection between urbanization and crime tend to use hedonic methodologies in order to focus on the localized effects of criminal activity on relative property prices. Most of these studies find an inverse relation between crime levels and property values. For example, in one of the first studies of this kind, Thaler (1978) found that a 1 standard deviation increase in the incidence of property crime tends to reduce home values by about three per cent. Similarly, Gibbons (2004) found an average decrease in property values of ten per cent in association with a 1 standard deviation increase in property crime. The evidence seems to confirm that property in neighbourhoods with relatively higher crime rates tends to have lower values than comparable property located in relatively ‘safer’ neighbourhoods in the same urban area.
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Navarro, I.A. (2012). Cocaine Cities: Exploring the Relationship between Urban Dynamics and the Drug Trade in South America. In: Rodgers, D., Beall, J., Kanbur, R. (eds) Latin American Urban Development into the 21st Century. Studies in Development Economics and Policy. Palgrave Macmillan, London. https://doi.org/10.1057/9781137035134_3
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DOI: https://doi.org/10.1057/9781137035134_3
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