On the Distributive Costs of Drug-Related Homicides

Arbeitspapier

Reliable estimates of the effects of violence on economic outcomes are scarce. We exploit the manyfold 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 house prices. We use an unusually rich dataset that provides national coverage on house prices and homicides and exploit within-municipality variations. We find that the impact of violence on housing prices is borne entirely by the poor sectors of the population. An increase in homicides equivalent to one standard deviation leads to a 3% decrease in the price of low-income housing. In spite of this large burden on the poor, the willingness to pay in order to reverse the increase in drug-related crime is not high. We estimate it to be approximately 0.1% of Mexico’s GDP.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Documento de Trabajo ; No. 158

Classification and Topics

• Classification: Wirtschaft
• Subject: Drug-related homicides ; Costs of crime ; Poverty

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ajzenman, Nicolas ; Galiani, Sebastian ; Seira, Enrique
• Event: Veröffentlichung
• (who): Universidad Nacional de La Plata, Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS)
• (where): La Plata
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/127674
• Last update: 10.03.2025, 11:42 AM CET