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Criminality and apartment prices: A study for Rio de Janeiro, Brazil

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  • Luiz Andrés Ribeiro Paixão

    (Federal University of Rio de Janeiro (UFRJ), Brazil and The Brazilian Institute of Geography and Statistics (IBGE), Brazil)

Abstract

Violence is one of the biggest problems in Brazilian society, Brazil being one of the most violent countries in the world. Rio de Janeiro is the second largest Brazilian city both in economic and population terms and is the most famous Brazilian city in the world. Measuring the social cost of violence is an important task to understand the Rio de Janeiro reality. There is some consensus in literature that housing prices are very sensitive to environment changes and there is a negative relationship between violence rates and housing price. We developed a hedonic price model to quantitatively determine the effect of violence on apartments price in Rio de Janeiro, using homicide and robbery rates as criminality proxies. A set of control variables were included since these variables were relevant to Rio de Janeiro’s apartment market. We used spatial econometric frameworks to deal with the spatial nature of the data. Our results show that the increase in criminal violence is linked to the decrease in apartments prices in Rio de Janeiro.

Suggested Citation

  • Luiz Andrés Ribeiro Paixão, 2025. "Criminality and apartment prices: A study for Rio de Janeiro, Brazil," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 19(1), pages 87-120, June.
    • Handle: RePEc:rrs:journl:v:19:y:2025:i:1:p:87-120
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    References listed on IDEAS

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    1. Allen Lynch & David Rasmussen, 2001. "Measuring the impact of crime on house prices," Applied Economics, Taylor & Francis Journals, vol. 33(15), pages 1981-1989.
    2. Vania Ceccato & Mats Wilhemson, 2011. "The impact of crime on apartment prices: evidence of Stockholm, Sweden," ERSA conference papers ersa10p1026, European Regional Science Association.
    3. Basu, Sabyasachi & Thibodeau, Thomas G, 1998. "Analysis of Spatial Autocorrelation in House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 61-85, July.
    4. Thaler, Richard, 1978. "A note on the value of crime control: Evidence from the property market," Journal of Urban Economics, Elsevier, vol. 5(1), pages 137-145, January.
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    Keywords

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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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