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On the Distributive Costs of Drug-Related Homicides

Author

Listed:
  • Nicolas Ajzenman
  • Sebastian Galiani
  • Enrique Seira

Abstract

There are few reliable estimates of the effects of violence on economic outcomes. This study exploits the manifold increase in homicides in 2008-2011 in Mexico resulting from its war on organized drug traffickers to estimate the effect of drug- related homicides on housing prices. Using an unusually rich dataset that provides national coverage on housing prices and homicides and exploits within- municipality variation, the study finds that the burden of violence affects only the poor. An increase in homicides equivalent to one standard deviation leads to a 3 percent decrease in low-income housing prices. Moreover, the effect on housing prices of long-term increases in crime is 40 percent larger.

Suggested Citation

  • Nicolas Ajzenman & Sebastian Galiani & Enrique Seira, 2014. "On the Distributive Costs of Drug-Related Homicides," Research Department Publications IDB-WP-471, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:idb-wp-471
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    Cited by:

    1. Iva Trako & Maria Micaela Sviatschi & Guadalupe Kavanaugh, 2018. "Access to Justice, Gender Violence and Children: Evidence from Women’s Justice Centers in Peru," Working Papers 2018-03, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    2. Brown, Ryan & Velásquez, Andrea, 2017. "The effect of violent crime on the human capital accumulation of young adults," Journal of Development Economics, Elsevier, vol. 127(C), pages 1-12.
    3. Clemens, Michael A., 2021. "Violence, development, and migration waves: Evidence from Central American child migrant apprehensions," Journal of Urban Economics, Elsevier, vol. 124(C).
    4. Ryan Brown & Verónica Montalva & Duncan Thomas & Andrea Velásquez, 2019. "Impact of Violent Crime on Risk Aversion: Evidence from the Mexican Drug War," The Review of Economics and Statistics, MIT Press, vol. 101(5), pages 892-904, December.
    5. Hale Utar, 2018. "Firms and Labor in Times of Violence: Evidence from the Mexican Drug War," CESifo Working Paper Series 7345, CESifo.
    6. Audrey Au Yong Lyn, 2021. "Male employment and female intra-household decision-making: a Mexican gold mining case study," Review of Economics of the Household, Springer, vol. 19(3), pages 699-737, September.
    7. Galiani, Sebastian & Lopez Cruz, Ivan & Torrens, Gustavo, 2018. "Stirring up a hornets’ nest: Geographic distribution of crime," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 17-35.
    8. Au Yong Lyn, Audrey, 2020. "Male employment and female intra-household decision-making: a Mexican gold mining case study," Munich Reprints in Economics 75733, University of Munich, Department of Economics.
    9. Sofía Fernández Guerrico, 2023. "Trade Shocks, Population Growth, and Migration," ULB Institutional Repository 2013/357236, ULB -- Universite Libre de Bruxelles.
    10. Nicolas Ajzenman & Sebastian Galiani & Enrique Seira, 2015. "On the Distributive Costs of Drug-Related Homicides," Journal of Law and Economics, University of Chicago Press, vol. 58(4).
    11. Elster, Yael & Zussman, Asaf & Zussman, Noam, 2017. "Rockets: The housing market effects of a credible terrorist threat," Journal of Urban Economics, Elsevier, vol. 99(C), pages 136-147.
    12. Ryan Brown, 2018. "The Mexican Drug War and Early-Life Health: The Impact of Violent Crime on Birth Outcomes," Demography, Springer;Population Association of America (PAA), vol. 55(1), pages 319-340, February.
    13. Maria Micaela Sviatschi, 2018. "Making a Narco: Childhood Exposure to Illegal Labor Markets and Criminal Life Paths," Working Papers sviatschi_making-a-narco_, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    14. Nowak, Adam & Sayago-Gomez, Juan, 2018. "Homeowner preferences after September 11th, a microdata approach," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 330-351.
    15. Germá-Bel & Maximilian Holst, 2016. "“A two-Sided coin: Disentangling the economic effects of the 'War on drugs' in Mexico”," IREA Working Papers 201611, University of Barcelona, Research Institute of Applied Economics, revised Apr 2016.
    16. Aldeco Leo Lorenzo Rodrigo & Jurado Jose A. & Ramírez-Álvarez Aurora A., 2022. "Internal Migration and Drug Violence in Mexico," Working Papers 2022-11, Banco de México.
    17. Aldeco Leo, Lorenzo & Jurado, Andrés & Ramírez-Álvarez, Aurora A., 2024. "Internal migration and drug violence in Mexico," Journal of Development Economics, Elsevier, vol. 171(C).
    18. Elster, Yael & Zussman, Noam, 2024. "Minorities and property values: Evidence from residential buildings in Israel," Journal of Urban Economics, Elsevier, vol. 141(C).
    19. Shawn Kantor & Carl T. Kitchens & Steven Pawlowski, 2021. "Civil Asset Forfeiture, Crime, And Police Incentives: Evidence From The Comprehensive Crime Control Act Of 1984," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 217-242, January.

    More about this item

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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