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The Effect of Stolen Goods Markets on Crime: Evidence from a Quasi Natural Experiment

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  • D'Este, Rocco

Abstract

This paper investigates the effect of stolen goods markets on crime. We focus on pawnshops, a business that have long been suspected of illicit trade. The analysis of a unique panel dataset of 2176 US counties from 1997 - 2010 uncovers an elasticity of pawnshops to theft crimes of 0.8 to 1.4. We then exploit the raise in gold price as a quasi - natural experiment, where the intensity of the treatment is given by the predetermined concentration of pawnshops in the county. A one standard deviation increase in pawnshops’ initial allocation raises the effect of gold price on burglaries by 0.05 to 0.10 standard deviation. No effect is ever detected on any other type of crime.

Suggested Citation

  • D'Este, Rocco, 2014. "The Effect of Stolen Goods Markets on Crime: Evidence from a Quasi Natural Experiment," Economic Research Papers 270415, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:270415
    DOI: 10.22004/ag.econ.270415
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