Not in my backyard? Not so fast. The effect of marijuana legalization on neighborhood crime. By Jeffrey Brinkman David Mok-Lamme.
Published in Regional Science and Urban Economics.
Abstract
This
paper studies the effects of marijuana legalization on neighborhood
crime and documents the patterns in retail dispensary locations over
time using detailed micro-level data from Denver, Colorado. To account
for endogenous retail dispensary locations, we use a novel
identification strategy that exploits exogenous changes in demand across
different locations arising from the increased importance of external
markets after the legalization of recreational marijuana sales. The
results imply that an additional dispensary in a neighborhood leads to a
reduction of 17 crimes per month per 10,000 residents, which
corresponds to roughly a 19 percent decline relative to the average
crime rate over the sample period. Reductions in crime are highly
localized, with no evidence of spillover benefits to adjacent
neighborhoods. Analysis of detailed crime categories provides insights
into the mechanisms underlying the reductions.
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