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Hidden Costs of Blight and Arson in Detroit: Evidence From a Natural Experiment in Devil's Night

Sammy Zahran, Terrence Iverson, Shawn P. McElmurry, Stephan Weiler () and Ryan Levitt

Ecological Economics, 2019, vol. 157, issue C, 266-277

Abstract: About one-fifth of the total housing stock in Detroit, Michigan is vacant, blighted or abandoned. Abandoned homes are particularly vulnerable to arson, with an estimated 20 such structures set ablaze each day. In 2011 the Fire Commissioner of Detroit announced a policy of fire non-suppression for abandoned structures. The policy is referred to as “Let it Burn.” While such a policy has the merit of focusing scarce firefighting resources on situations in which people's lives are immediately at risk, we show that the policy exposes residents city-wide to various hazardous inorganic gases (CO, SO2, and NO2) released in uncontrolled fire events. By exploiting an annual tradition in Detroit called Devil's Night, we overcome a measurement problem involving the statistical attribution of changes in city-wide air quality due to fire emissions, and we conservatively estimate per burn pollutant externality costs from inorganic gas releases that include health damages in excess mortality and hospitalization for circulatory conditions in elderly populations. The estimated present value health burden for elderly residents of Detroit due to cardiovascular complications resulting from arson-related emissions of CO is greater than $300 million dollars. Since this is only a subset of the total social costs attributable to arson, the results suggest that a large scale blight reduction program might be socially efficient. Building on our empirical findings, we argue that the dilemma facing Detroit has the structure of a classic poverty trap. The corresponding insights may be relevant for other so-called rust belt cities grappling with the ecological economics of depopulation, housing abandonment, and arson.

Keywords: Arson; Blight; Poverty trap; Detroit; Inorganic gases; Health (search for similar items in EconPapers)
JEL-codes: I12 I18 J13 Q51 Q53 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.ecolecon.2018.11.009

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