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

39 Pages Posted: 21 Jun 2000

See all articles by Jeffrey Grogger

Jeffrey Grogger

University of Chicago - Harris School of Public Policy; National Bureau of Economic Research (NBER)

Mike Willis

University of California, Santa Barbara (UCSB) - Department of Economics

Date Written: January 1998

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

Grogger, Jeffrey T. and Willis, Mike, The Introduction of Crack Cocaine and the Rise in Urban Crime Rates (January 1998). NBER Working Paper No. w6353. Available at SSRN: https://ssrn.com/abstract=226104

Jeffrey T. Grogger (Contact Author)

University of Chicago - Harris School of Public Policy ( email )

1155 East 60th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mike Willis

University of California, Santa Barbara (UCSB) - Department of Economics ( email )

2127 North Hall
Santa Barbara, CA 93106
United States

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