Is Crime Bad for Business? Crime and Commercial Property Values in New York City

29 Pages Posted: 6 Jun 2016

See all articles by Michael Lens

Michael Lens

University of California, Los Angeles (UCLA)

Rachel Meltzer

The New School - Robert J. Milano Graduate School of Management & Urban Policy

Date Written: June 2016

Abstract

To test how crime affects economic activity, we use point‐specific data on crime, commercial property sales and assessed values from New York City, relying on an instrumental variables strategy. We find that crime reduces commercial property values, and the magnitude of the effect depends on the type and geography of crime. Elasticities range from −0.1 to −0.5. We find stronger evidence for negative violent crime effects in neighborhoods with lower incomes and higher shares of minority residents. Thus, disadvantaged neighborhoods are doubly harmed by crime - they have higher crime rates and those crimes have stronger effects on economic activity.

Suggested Citation

Lens, Michael and Meltzer, Rachel, Is Crime Bad for Business? Crime and Commercial Property Values in New York City (June 2016). Journal of Regional Science, Vol. 56, Issue 3, pp. 442-470, 2016. Available at SSRN: https://ssrn.com/abstract=2790380 or http://dx.doi.org/10.1111/jors.12254

Michael Lens (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

Rachel Meltzer

The New School - Robert J. Milano Graduate School of Management & Urban Policy ( email )

New York, NY
United States

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