On the Distributive Costs of Drug-Related Homicides

Nicolas Ajzenman, Sebastian Galiani and Enrique Seira

CEDLAS, Working Papers from CEDLAS, Universidad Nacional de La Plata

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 variations. We find that the impact of violence on housing prices is borne entirely by the poor sectors of the population. An increase in homicides equivalent to one standard deviation leads to a 3% decrease in the price of low-income housing. In spite of this large burden on the poor, the willingness to pay in order to reverse the increase in drug-related crime is not high. We estimate it to be approximately 0.1% of Mexico’s GDP.

Pages: 45 pages
Date: 2014-04
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (4)

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http://cedlas.econo.unlp.edu.ar/archivos_upload/doc_cedlas158.pdf (application/pdf)

Related works:
Journal Article: On the Distributive Costs of Drug-Related Homicides (2015)
Working Paper: On the Distributive Costs of Drug-Related Homicides (2014)
Working Paper: On the Distributive Costs of Drug-Related Homicides (2014)
Working Paper: On the Distributive Costs of Drug-Related Homicides (2014)
Working Paper: On the Distributive Costs of Drug-Related Homicides (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:dls:wpaper:0158

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