Crime and (price) punishment in the Chilean real estate market: the case of Santiago

We investigate the relationship between crime and property prices in the Santiago (Chile) real estate market. The study considers two property types (single-family homes and apartments), and twelve different types of crimes. The study shows the importance of relying on a two-stage least square appro...

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Bibliographic Details
Main Author: Andrade, Nathaly (Author)
Contributors: Cifuentes, Arturo
Format: Electronic Article
Language:English
Published: 2021
In: Crime, law and social change
Year: 2021, Volume: 76, Issue: 5, Pages: 497-523
Online Access: Volltext (lizenzpflichtig)
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Keywords:
Wohnung
Eigentum
Kriminalität
Zusammenhang
Chile
Description
Summary:We investigate the relationship between crime and property prices in the Santiago (Chile) real estate market. The study considers two property types (single-family homes and apartments), and twelve different types of crimes. The study shows the importance of relying on a two-stage least square approach (2SLS) based on instrumental variables (IV) to address the endogeneity-of-crime problem. It also shows the benefits of incorporating factor analysis to explore the price-crime dynamics. We find that in general crime has a negative effect on property prices, but the size of this effect varies considerably depending on the type of crime. The study also finds that apartments respond almost immediately to changes in crime rates while single-family homes take longer to respond. Finally, ranking different crimes based on their (price/crime) elasticities yield almost identical sequences regardless of the type of property or time-lag employed.
Item Description:Literaturverzeichnis: Seite 521-523
Physical Description:Diagramme
ISSN:1573-0751
DOI:10.1007/s10611-021-09939-0