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Strip Clubs, “Secondary Effects” and Residential Property Prices

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  • Taggert J. Brooks
  • Brad R. Humphreys
  • Adam Nowak

Abstract

Municipalities regulate sexually oriented businesses (SOBs) through the “secondary effects” doctrine, which justifies limiting First Amendment speech protections inside SOBs. Negative effects of SOBs on nearby neighborhood quality are a frequently cited secondary effect. Little empirical evidence exists that SOBs generate such negative externalities. If SOBs generate negative externalities, then nearby property prices should decrease when a strip club opens. We estimate regression models of housing prices to determine the effect of new clubs on nearby residential property prices in Seattle, exploiting the termination of a 17‐year moratorium on openings and find no evidence that strip clubs have “secondary effects.”

Suggested Citation

  • Taggert J. Brooks & Brad R. Humphreys & Adam Nowak, 2020. "Strip Clubs, “Secondary Effects” and Residential Property Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(3), pages 850-885, September.
    • Handle: RePEc:bla:reesec:v:48:y:2020:i:3:p:850-885
    DOI: 10.1111/1540-6229.12236
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