On the Distributive Costs of Drug-Related Homicides

46 Pages Posted: 2 Dec 2013 Last revised: 25 Jan 2015

See all articles by Nicolas Ajzenman

Nicolas Ajzenman

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics; IZA Institute of Labor Economics

Sebastian Galiani

University of Maryland - Department of Economics

Enrique Seira

Instituto Tecnológico Autónomo de México (ITAM)

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Date Written: January 24, 2015

Abstract

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 variation. We find that the burden of violence only affect the poor. For low-income housing, an increase in homicides equivalent to one standard deviation leads to a 3% decrease in house prices.

Keywords: Drug-related homicides, Poverty, Costs of crime

JEL Classification: K4, I3

Suggested Citation

Ajzenman, Nicolás and Galiani, Sebastian and Seira, Enrique, On the Distributive Costs of Drug-Related Homicides (January 24, 2015). Available at SSRN: https://ssrn.com/abstract=2362076 or http://dx.doi.org/10.2139/ssrn.2362076

Nicolás Ajzenman (Contact Author)

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Rua Itapeva 474 s.1202
São Paulo, São Paulo 01332-000
Brazil

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Sebastian Galiani

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

Enrique Seira

Instituto Tecnológico Autónomo de México (ITAM) ( email )

Av. Camino a Sta. Teresa 930
Col. Héroes de Padierna
Mexico City, D.F. 01000, Federal District 01080
Mexico

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