The Cost of Avoiding Crime: The Case of Bogotá

Alejandro Gaviria, Carlos Medina, Leonardo Morales and Jairo Nunez ()

No 4600, Borradores de Economia from Banco de la Republica

Abstract: We use hedonic price models to estimate the value households are willing to pay to avoidviolent crime in the city of Bogotá. We find that households living in the highestsocioeconomic level (stratum 6) pay up to 7.2% of their house values in order to preventaverage homicide rates from increasing in one standard deviation. Households in stratum 5pay up to 2.4% of their house values to prevent homicide rates from increasing. The resultsindicate the willingness to pay for security by households in Bogotá, and additionally,reveal that a pure public good like security, ends up creating urban private markets thatauction security. These markets imply different levels of access to public goods among thepopulation, and actually, the exclusion of the poorest. We find as well evidence of negativecapitalization of the rate of attacks against life, and positive capitalization of the presenceof police authority.

Keywords: Housing Demand; Crime; Illegal Behavior; Law Enforcement (search for similar items in EconPapers)
JEL-codes: K40 K42 R21 (search for similar items in EconPapers)
Pages: 32
Date: 2008-04-13
New Economics Papers: this item is included in nep-lam and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Chapter: The Cost of Avoiding Crime: The Case of Bogotá (2010)
Working Paper: The Cost of Avoiding Crime: The Case of Bogotá (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:004600

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