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The racial geography of street vice

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  • O'Flaherty, Brendan
  • Sethi, Rajiv

Abstract

Street vice (anonymous prostitution, gambling, and the sale of illicit drugs) is spatially concentrated and confined largely to Black neighborhoods in central cities, even though demand is quite evenly distributed throughout the general population. We show how this pattern can arise through the interacting location decisions of sellers, buyers, and non-user households. Areas with high demand density (cities) have lower prices and more tightly packed sellers in equilibrium relative to areas with lower demand density (suburbs) under autarky. When trade between city and suburb is possible, competitive pressure from the city lowers suburban prices and seller density. Higher income households distance themselves from street vice, causing the exposed population to become poorer and disproportionately Black. Even mild preferences over neighborhood racial composition can then induce lower income Whites to exit, resulting in racial segregation. The relationship between segregation and exposure to vice can be non-monotonic and discontinuous: decreased segregation implies greater sorting by income, and hence larger wage disparities between city and suburb. If such disparities get too large, all sales can shift discontinuously to the city and result in higher overall Black exposure even though more Blacks now reside in the suburbs.

Suggested Citation

  • O'Flaherty, Brendan & Sethi, Rajiv, 2010. "The racial geography of street vice," Journal of Urban Economics, Elsevier, vol. 67(3), pages 270-286, May.
  • Handle: RePEc:eee:juecon:v:67:y:2010:i:3:p:270-286
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    Cited by:

    1. Marceau, Nicolas & Mongrain, Steeve, 2011. "Competition in law enforcement and capital allocation," Journal of Urban Economics, Elsevier, vol. 69(1), pages 136-147, January.
    2. Bjerk, David, 2010. "Thieves, thugs, and neighborhood poverty," Journal of Urban Economics, Elsevier, vol. 68(3), pages 231-246, November.
    3. Florent Dubois, 2017. "The Sources of Segregation," Working Papers halshs-01524506, HAL.
    4. DeAngelo, Gregory, 2012. "Making space for crime: A spatial analysis of criminal competition," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 42-51.
    5. Cunningham, Scott & Kendall, Todd D., 2011. "Prostitution 2.0: The changing face of sex work," Journal of Urban Economics, Elsevier, vol. 69(3), pages 273-287, May.
    6. O'Flaherty, Brendan & Sethi, Rajiv, 2010. "Homicide in black and white," Journal of Urban Economics, Elsevier, vol. 68(3), pages 215-230, November.
    7. O’Flaherty, Brendan & Sethi, Rajiv, 2015. "Urban Crime," Handbook of Regional and Urban Economics, Elsevier.

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