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Explosions and Their Impact on House Prices: Evidence from Stockholm (2021–2024)

Author

Listed:
  • Boije, Robert

    (SBAB)

  • Stenvall, David

    (Linköpings University)

  • Wilhelmsson, Mats

    (Department of Real Estate and Construction Management, Royal Institute of Technology)

Abstract

Explosions have become an alarming feature of gang-related crime in Sweden, but their specific impact on urban housing markets remains underexplored. The study provides the first systematic analysis of explosions and housing prices in the international and Swedish research literature. We examine the impact of explosions on residential property prices in Stockholm. Using a dataset of over 124,000 housing transactions and 147 explosions between 2021 and 2024, we apply a hedonic difference-in-difference model, enhanced with propensity score matching and geographically weighted regression. We find that property prices within 500 meters of an explosion decline by 2–9%, with stronger effects in areas hit by multiple incidents and in more affluent districts. Price responses vary both spatially and over time, and the impact tends to be more persistent in neighbourhoods with repeated exposure. These effects appear driven by media coverage, perceived safety, and localised stigma. Our findings reveal how episodic violence can shape urban inequality and highlight the need for targeted housing and safety policies.

Suggested Citation

  • Boije, Robert & Stenvall, David & Wilhelmsson, Mats, 2025. "Explosions and Their Impact on House Prices: Evidence from Stockholm (2021–2024)," Working Paper Series 25/8, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    • Handle: RePEc:hhs:kthrec:2025_008
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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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