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

  • Jeff Grogger
  • Mike Willis

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.

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File URL: http://www.nber.org/papers/w6353.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6353.

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Date of creation: Jan 1998
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Publication status: published as Grogger, J. and Michael Willis. “The Emergence of Crack Cocaine and the Rise in Urban Crime Rates.” Review of Economics and Statistics, November 2000.
Handle: RePEc:nbr:nberwo:6353
Note: LS
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  1. Gary S. Becker & Michael Grossman & Kevin M. Murphy, 1990. "An Empirical Analysis of Cigarette Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 61, Chicago - Center for Study of Economy and State.
  2. 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.
  3. 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.
  4. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-91, October.
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