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The Introduction of Crack Cocaine and the Rise in Urban Crime Rates

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  • Jeff Grogger
  • Mike Willis

Abstract

Despite widespread popular accounts linking crack cocaine to inner-city decay systematic research has analyzed the effect of the introduction of crack on urban crime. We" study this question using FBI crime rates for 27 metropolitan areas and two sources of" information on the date at which crack first appeared in those cities. Using methods designed to" control for confounding time trends and unobserved differences among metropolitan areas find that the introduction of crack has substantial effects on violent crime but essentially no effect" on property crime. We explain these results by characterizing crack cocaine as a technological" innovation in the market for cocaine intoxication and by positing that different types of crimes" play different roles in the market for illegal drugs. In a market with incomplete property rights" and inelastic demand, a technological innovation increases violence on the part of distributors but" decreases property crime on the part of consumers. We also find evidence that the increase in" urban crime during the 1980's occurred in two distinct phases: an early phase largely attributable" to the spread of crack and a later phase largely unrelated to it.

Suggested Citation

  • Jeff Grogger & Mike Willis, 1998. "The Introduction of Crack Cocaine and the Rise in Urban Crime Rates," NBER Working Papers 6353, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6353
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    References listed on IDEAS

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    1. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    2. Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1994. "An Empirical Analysis of Cigarette Addiction," American Economic Review, American Economic Association, vol. 84(3), pages 396-418, June.
    3. Blumstein, Alfred & Cohen, Jacqueline & Miller, Harold D., 1980. "Demographically disaggregated projections of prison populations," Journal of Criminal Justice, Elsevier, vol. 8(1), pages 1-26.
    4. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-791, October.
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    Cited by:

    1. Collins, William J. & Margo, Robert A., 2003. "Race and the value of owner-occupied housing, 1940-1990," Regional Science and Urban Economics, Elsevier, vol. 33(3), pages 255-286, May.
    2. Marcel Fafchamps & Christine Moser, 2003. "Crime, Isolation and Law Enforcement," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(4), pages 625-671, December.
    3. Desimone, Jeff, 2001. "The Effect of Cocaine Prices on Crime," Economic Inquiry, Western Economic Association International, vol. 39(4), pages 627-643, October.
    4. Mireia Jofre-Bonet & Jody L. Sindelar, 2002. "Drug Treatment as a Crime Fighting Tool," NBER Working Papers 9038, National Bureau of Economic Research, Inc.
    5. Bedard, Kelly & Helland, Eric, 2004. "The location of women's prisons and the deterrence effect of "harder" time," International Review of Law and Economics, Elsevier, vol. 24(2), pages 147-167, June.

    More about this item

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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