Explosions and Their Impact on House Prices: Evidence from Stockholm (2021–2024)

Robert Boije (), David Stenvall () and Mats Wilhelmsson ()
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Robert Boije: SBAB
David Stenvall: Linköpings University
Mats Wilhelmsson: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Teknikringen 10B, 100 44 Stockholm, Sweden

No 25/8, Working Paper Series from Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance

Abstract: Explosions have become an alarming feature of gang-related crime in Sweden, but their specific impact on urban housing markets remains underexplored. The study provides the first systematic analysis of explosions and housing prices in the international and Swedish research literature. We examine the impact of explosions on residential property prices in Stockholm. Using a dataset of over 124,000 housing transactions and 147 explosions between 2021 and 2024, we apply a hedonic difference-in-difference model, enhanced with propensity score matching and geographically weighted regression. We find that property prices within 500 meters of an explosion decline by 2–9%, with stronger effects in areas hit by multiple incidents and in more affluent districts. Price responses vary both spatially and over time, and the impact tends to be more persistent in neighbourhoods with repeated exposure. These effects appear driven by media coverage, perceived safety, and localised stigma. Our findings reveal how episodic violence can shape urban inequality and highlight the need for targeted housing and safety policies.

Keywords: Explosions; Housing Prices; Hedonic Price Model; Difference-in-Difference; Propensity Score Matching; Stockholm; Sweden (search for similar items in EconPapers)
JEL-codes: C21 K42 R31 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2025-08-25
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