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Potential crime risk and housing market responses

Author

Listed:
  • Kim, Seonghoon
  • Lee, Kwan Ok

Abstract

We study how information on local (dis)amenities is transmitted and manifested in housing markets. Using nationwide data on multifamily homes in South Korea, we analyze heterogeneity in the effect of a sex offender's presence on sale prices and rents of nearby homes. Our results demonstrate that the price effect of the offender's move-in varies significantly by spatial context. People react more strongly and persistently to the move-in of the offender in places wherein indicators of social connectedness are stronger, such as places with relatively low population density. We also find that, unlike housing prices, rents do not change in response to the move-in of a sex offender. These heterogeneous housing market responses may be attributed to better acquisition of and higher sensitivity to information on local (dis)amenities among (potential) members in highly connected communities, particularly among homeowners. We interpret our findings as suggestive evidence that social capital and social networks are important sources of information on local (dis)amenities.

Suggested Citation

  • Kim, Seonghoon & Lee, Kwan Ok, 2018. "Potential crime risk and housing market responses," Journal of Urban Economics, Elsevier, vol. 108(C), pages 1-17.
    • Handle: RePEc:eee:juecon:v:108:y:2018:i:c:p:1-17
    DOI: 10.1016/j.jue.2018.09.001
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    Citations

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    Cited by:

    1. Franco, Sofia F. & Cutter, W. Bowman, 2022. "The determinants of non-residential real estate values with special reference to environmental local amenities," Ecological Economics, Elsevier, vol. 201(C).
    2. Shin, Jinwook & Kim, Seonghoon & Koh, Kanghyock, 2021. "Economic impact of targeted government responses to COVID-19: Evidence from the large-scale clusters in Seoul," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 199-221.
    3. Jinwook Shin & Seonghoon Kim & Kanghyock Koh, 2020. "Economic Impact of Targeted Government Responses to COVID-19: Evidence from the First Large-scale Cluster in Seoul," Working Paper Series no138, Institute of Economic Research, Seoul National University.
    4. Tang, Cheng Keat & Le, Thao, 2023. "Crime risk and housing values: Evidence from the gun offender registry," Journal of Urban Economics, Elsevier, vol. 134(C).
    5. Ikuto Aiba & Yasuhiro Sato, 2020. "A Theory of Public Goods under Complementarity between Safety and Consumptions," CIRJE F-Series CIRJE-F-1150, CIRJE, Faculty of Economics, University of Tokyo.
    6. Michele Battisti & Giovanni Bernardo & Andrea Mario Lavezzi & Giuseppe Maggio, 2022. "Shooting down the price: Evidence from Mafia homicides and housing prices," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 659-683, June.

    More about this item

    Keywords

    Crime risk; Megan's law; Housing price; Spatial context; Social connectedness;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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