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Drugs on the Web, Crime in the Streets - The Impact of Dark Web Marketplaces on Street Crime

Diego Zambiasi

No 202025, Working Papers from School of Economics, University College Dublin

Abstract: The Dark Web has changed the way drugs are traded globally by shifting trade away from the streets and onto the web. In this paper, I study whether the Dark Web has an impact on street crime, a common side effect of traditional drug trade. To identify a causal effect, I use daily data from the US and exploit unexpected shutdowns of large online drug trading platforms. In a regression discontinuity design, I compare crime rates in days after the shutdowns to those immediately preceding them. I find that shutting down Dark Web markets leads to a significant increase in drug trade in the streets. However, the effect is short-lived. In the days immediately following shutdowns, drug-related crimes increase by five to almost ten percent but revert to pre-shutdown levels within ten days. I find no impact of shutdowns of Dark Web marketplaces on thefts, assaults, homicides and prostitution.

Keywords: Dark web; Darknet markets; Drugs; Crime (search for similar items in EconPapers)
JEL-codes: K24 K42 L13 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2020-09
New Economics Papers: this item is included in nep-law and nep-pay
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http://hdl.handle.net/10197/11645 First version, 2020 (application/pdf)

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Working Paper: Drugs on the Web, Crime in the Streets. The impact of Dark Web marketplaces on street crime (2020) Downloads
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