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Not in My Backyard? Not So Fast. The Effect of Marijuana Legalization on Neighborhood Crime

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  • Jeffrey Brinkman
  • David Mok-Lamme

Abstract

This paper studies the effects of marijuana legalization on neighborhood crime using unique geospatial data from Denver, Colorado. We construct a highly local panel data set that includes changes in the location of marijuana dispensaries and changes in neighborhood crime. To account for endogenous retail dispensary locations, we use a novel identification strategy that exploits exogenous changes in demand across different locations. The change in geographic demand arises from the increased importance of access to external markets caused by a change in state and local policy. The results imply that retail dispensaries lead to reduced crime in the neighborhoods where they are located. Reductions in crime are highly localized, with no evidence of benefits for adjacent neighborhoods. The spatial extent of these effects are consistent with a policing or security response, and analysis of detailed crime categories provides indirect evidence that the reduction in crime arises from a disruption of illicit markets.

Suggested Citation

  • Jeffrey Brinkman & David Mok-Lamme, 2017. "Not in My Backyard? Not So Fast. The Effect of Marijuana Legalization on Neighborhood Crime," Working Papers 17-19, Federal Reserve Bank of Philadelphia, revised 18 Jul 2017.
    • Handle: RePEc:fip:fedpwp:17-19
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    References listed on IDEAS

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    Cited by:

    1. Carrieri, Vincenzo & Madio, Leonardo & Principe, Francesco, 2019. "Light cannabis and organized crime: Evidence from (unintended) liberalization in Italy," European Economic Review, Elsevier, vol. 113(C), pages 63-76.
    2. Jesse Burkhardt & Chris Goemans, 2019. "The short-run effects of marijuana dispensary openings on local crime," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(1), pages 163-189, August.
    3. Carrieri,V.; & Madio,L.; & Principe, F.;, 2019. "Do-It-Yourself medicine? The impact of light cannabis liberalization on prescription drugs," Health, Econometrics and Data Group (HEDG) Working Papers 19/07, HEDG, c/o Department of Economics, University of York.
    4. Auriol, Emmanuelle & Mesnard, Alice & Perrault, Tiffanie, 2019. "Defeating Crime? An Economic Analysis of Cannabis Legalization Policies," CEPR Discussion Papers 13814, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    legalization; drugs; policy evaluation; crime;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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