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Is crime in Mexico a disamenity? Evidence from a hedonic valuation approach

Author

Listed:
  • Scott Loveridge

    (Michigan State University, United States)

  • Dusan Paredes

    (Departamento de Economía, Universidad Católica del Norte, Chile)

Abstract

Since Roback (1982)’s seminal work, the literature has evaluated the role of the amenities to equilibrate the regional differentials of nominal wages and prices. While these studies generally find evidence for traditional amenities and disamenities in developed countries, it still exists a scarce exploration on how those characteristics assessed, like violence, affect the equilibrium in less developed countries. In this paper, we explore violence as amenity or disamenity for the case of Mexico as a particular and unique natural experiment. We use the hedonic wage and rent theory proposed by Roback using data from the Mexican Household Income and Expenditure Survey, along with other information at municipal and state level. For our particular hypothesis, we find evidence to support that inhabitants in traditional drug trafficking states could consider drug-related crime as an amenity.

Suggested Citation

  • Scott Loveridge & Dusan Paredes, 2015. "Is crime in Mexico a disamenity? Evidence from a hedonic valuation approach," Documentos de Trabajo en Economia y Ciencia Regional 64, Universidad Catolica del Norte, Chile, Department of Economics, revised Sep 2015.
    • Handle: RePEc:cat:dtecon:dt201511
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    Cited by:

    1. 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.
    2. Umbach, Tim, 2020. "A Vicious Cycle of Regional Unemployment and Crime? - Evidence from German Counties," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224611, Verein für Socialpolitik / German Economic Association.
    3. Gregory Brock, 2020. "The real Oaxaca decomposition: convergence within Mexico’s Oaxaca region in the twenty-first century—Do types of crime and religious belief matter?," Economic Change and Restructuring, Springer, vol. 53(4), pages 543-569, November.
    4. Andres Jauregui & Kirk C. Heriot & David T. Mitchell, 2021. "Corruption and formal-sector entrepreneurship in a middle-income country: spatial analysis of firm births in the Mexican states," Small Business Economics, Springer, vol. 57(4), pages 1957-1972, December.
    5. Diana Romero‐Espinosa & Mauricio Sarrias & Ricardo Daziano, 2021. "Are preferences for city attributes heterogeneous? An assessment using a discrete choice experiment," Papers in Regional Science, Wiley Blackwell, vol. 100(1), pages 251-272, February.
    6. repec:rim:rimwps:19-05 is not listed on IDEAS
    7. Monkkonen, Paavo, 2016. "Where do Property Rights Matter More? Explaining the Variation in Demand for Property Titles across Cities in Mexico," World Development, Elsevier, vol. 88(C), pages 67-78.

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    Keywords

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    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • H4 - Public Economics - - Publicly Provided Goods
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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