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Challenging the idyll: Does crime affect property prices in small towns?

Author

Listed:
  • Ceccato, Vania

    (Centre for Banking and Finance)

  • Wilhelmsson, Mats

    (Centre for Banking and Finance)

Abstract

This article reports on testing the effect of residential burglary on the housing market in a relatively small Swedish town using data on sales in 2005 and 2011. This assessment is important since the international evidence is dominated by studies based on large urban areas. The study employs different strategies of hedonic price modelling to estimate the impact of crime while controlling for property and neighbourhood characteristics; in particular, it explores the use of quantile regression. Geographic Information System (GIS) is used to combine apartment sales data with residential burglaries, land use characteristics and demographic data. Findings show that residential burglary has a significant negative effect on property prices in 2011 but no impact in 2005. Results also show that the effect of housing characteristics on apartment prices can be explained more in detail by estimating quantile regression models across price categories than using traditional modelling strategies.

Suggested Citation

  • Ceccato, Vania & Wilhelmsson, Mats, 2013. "Challenging the idyll: Does crime affect property prices in small towns?," Working Paper Series 13/10, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    • Handle: RePEc:hhs:kthrec:2013_010
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    More about this item

    Keywords

    Residential burglary; apartment prices; hedonic modelling; quantile regression; GIS;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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