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How Local is the Crime Effect on House Prices?

Author

Listed:
  • Paula Margaretic

    (Universidad de San Andrés
    Universidad Adolfo Ibañez)

  • Juan Bautista Sosa

    (Universidad de San Andrés)

Abstract

We exploit the local variations crime across time to measure the effect of local crime on house prices. We have access to a very granular micro-dataset consisting of real estate listings for sale in Buenos Aires City, Mexico City and São Paulo. We follow an IV procedure and instrument local crime with the homicide rate. We find that our IV estimates for local crime are greater than their corresponding pseudo-panel linear model coefficient estimates. Second, we show that the direct crime elasticity to house prices is robust to varying sizes of the regular polygons. However, the spillover effects of crime on house prices fade away when the size of the polygons is sufficiently large.

Suggested Citation

  • Paula Margaretic & Juan Bautista Sosa, 2025. "How Local is the Crime Effect on House Prices?," The Journal of Real Estate Finance and Economics, Springer, vol. 70(4), pages 754-793, May.
    • Handle: RePEc:kap:jrefec:v:70:y:2025:i:4:d:10.1007_s11146-023-09941-4
    DOI: 10.1007/s11146-023-09941-4
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