The lasting effects of crime: The relationship of discovered methamphetamine laboratories and home values
AbstractThis study estimates a household's willingness to pay to avoid the stigma of crime while minimizing concerns of omitted variable bias. By assuming methamphetamine producers locate approximately at random within a narrowly defined neighborhood, this study is able to use hedonic estimation methods to estimate the impact of the discovery of a methamphetamine laboratory on the home values near that location. Specifically, the analysis designates those closest to the site as the treated, while those slightly farther away act as the comparison group. The discovery of a methamphetamine laboratory has a significant effect on the property values of those homes close to the location that peaks from 6 to 12months after each lab's discovery. The estimates found in this study range from a decrease in sale prices of 10% to 19% in the year following a laboratory's discovery compared to the prices for homes that are farther away but still in the same neighborhood.
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Bibliographic InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 43 (2013)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/regec
Location choice; Crime valuation; Methamphetamine; Housing prices;
Other versions of this item:
- Joshua Congdon-Hohman, 2011. "The Lasting Effects of Crime: The Relationship of Discovered Methamphetamine Laboratories and Home Values," Working Papers 1114, College of the Holy Cross, Department of Economics.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Other Production and Pricing Analysis
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