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Your Friends and Neighbors: Localized Economic Development and Criminal Activity

Author

Listed:
  • Matthew Freedman

    (Drexel University)

  • Emily G. Owens

    (University of Pennsylvania)

Abstract

We exploit a sudden shock to demand for a subset of low-wage workers generated by the 2005 Base Realignment and Closure (BRAC) program in San Antonio, Texas, to identify the effects of localized economic development on crime. We use a difference-in-differences methodology that takes advantage of variation in BRAC’s impact over time and across neighborhoods. We find that appropriative criminal behavior increases in neighborhoods where a fraction of residents experienced increases in earnings. This effect is driven by residents who were unlikely to be BRAC beneficiaries, implying that criminal opportunities are important in explaining patterns of crime.

Suggested Citation

  • Matthew Freedman & Emily G. Owens, 2016. "Your Friends and Neighbors: Localized Economic Development and Criminal Activity," The Review of Economics and Statistics, MIT Press, vol. 98(2), pages 233-253, May.
    • Handle: RePEc:tpr:restat:v:98:y:2016:i:2:p:233-253
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00484
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    Citations

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    Cited by:

    1. Andrews, Rodney J. & Deza, Monica, 2018. "Local natural resources and crime: Evidence from oil price fluctuations in Texas," Journal of Economic Behavior & Organization, Elsevier, vol. 151(C), pages 123-142.
    2. Pallab K. Ghosh & Gary A. Hoover & Zexuan Liu, 2020. "Do State Minimum Wages Affect the Incarceration Rate?," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 845-872, January.
    3. Yang, Crystal S., 2017. "Local labor markets and criminal recidivism," Journal of Public Economics, Elsevier, vol. 147(C), pages 16-29.
    4. Kevin Schnepel, 2017. "Do post-prison job opportunities reduce recidivism?," IZA World of Labor, Institute of Labor Economics (IZA), pages 399-399, November.
    5. Montolio, Daniel, 2016. "The Unintended Consequences on Crime of "Pennies from Heaven"," IDB Publications (Working Papers) 7431, Inter-American Development Bank.
    6. Songman Kang, 2016. "Inequality and crime revisited: effects of local inequality and economic segregation on crime," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(2), pages 593-626, April.
    7. García Hombrados, Jorge, 2020. "The lasting effects of natural disasters on property crime: Evidence from the 2010 Chilean earthquake," Journal of Economic Behavior & Organization, Elsevier, vol. 175(C), pages 114-154.
    8. Badi H. Baltagi & Pallab K. Ghosh, 2019. "Partial Distributional Policy Effects Under Endogeneity," Sankhya B: The Indian Journal of Statistics, Springer;Indian Statistical Institute, vol. 81(1), pages 123-145, September.
    9. Compton, Andrew, 2019. "Decomposing the Societal Opportunity Costs of Property Crime," MPRA Paper 97002, University Library of Munich, Germany.
    10. Eduardo Ferraz & Rodrigo Soares & Juan Vargas, 2022. "Unbundling the relationship between economic shocks and crime," Chapters, in: Paolo Buonanno & Paolo Vanin & Juan Vargas (ed.), A Modern Guide to the Economics of Crime, chapter 8, pages 184-204, Edward Elgar Publishing.
    11. Montolio, Daniel, 2018. "The effects of local infrastructure investment on crime," Labour Economics, Elsevier, vol. 52(C), pages 210-230.
    12. Kevin T. Schnepel, 2018. "Good Jobs and Recidivism," Economic Journal, Royal Economic Society, vol. 128(608), pages 447-469, February.
    13. Matthew Freedman & Emily Owens & Sarah Bohn, 2018. "Immigration, Employment Opportunities, and Criminal Behavior," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 117-151, May.
    14. Songman Kang, 2016. "Inequality and crime revisited: effects of local inequality and economic segregation on crime," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(2), pages 593-626, April.
    15. Fe, Hao & Sanfelice, Viviane, 2022. "How bad is crime for business? Evidence from consumer behavior," Journal of Urban Economics, Elsevier, vol. 129(C).
    16. Michael Appiah‐Kubi & Jeneshia Jarrett, 2023. "Chinese aid and crime: Evidence from Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 1619-1647, October.
    17. Calamunci, Francesca & Lonsky, Jakub, 2022. "Highway to Hell? Interstate Highway System and Crime," IZA Discussion Papers 15800, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Crime; Local Economic Development; Criminal Opportunities;
    All these keywords.

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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