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Dismantling a market for stolen goods: Evidence from the regulation of junkyards in Brazil

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  • Mancha, Andre

Abstract

This paper investigates the impact of monitoring and market regulation on the illicit market for stolen goods, focusing on the association between junkyards and auto theft. I explore the effects of a state-level regulation implemented in São Paulo in 2014, which enhanced supervision of the market for auto parts. I find an 8.11% decline in auto theft for municipalities presenting at least one junkyard specialized in auto parts compared to the control group. Additionally, I provide evidence of a meaningful decrease in vehicle insurance prices, suggesting tangible economic benefits for citizens as a result of lower crime rates. These findings offer crucial insights into market regulation as a crime deterrence strategy to reduce the trade of stolen goods, highlighting its complementarity with traditional public security policies.

Suggested Citation

  • Mancha, Andre, 2025. "Dismantling a market for stolen goods: Evidence from the regulation of junkyards in Brazil," Journal of Development Economics, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:deveco:v:175:y:2025:i:c:s0304387825000483
    DOI: 10.1016/j.jdeveco.2025.103497
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    More about this item

    Keywords

    Economics of crime; Law economics; Illegal markets;
    All these keywords.

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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