NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

There Goes the Neighborhood? Estimates of the Impact of Crime Risk on Property Values From Megan's Laws

Leigh L. Linden, Jonah E. Rockoff

NBER Working Paper No. 12253
Issued in May 2006, Revised in April 2007
NBER Program(s):   LE   PE

We combine data from the housing market with data from the North Carolina Sex Offender Registry to estimate how individuals value living in close proximity to a convicted criminal. We use the exact location of sex offenders to exploit variation in the threat of crime within small homogenous groupings of homes, and we use the timing of sex offenders' arrivals to control for baseline property values in the area. We find statistically and economically significant negative effects of sex offenders' locations that are extremely localized. Houses within a one-tenth mile area around the home of a sex offender fall by 4 percent on average (about $5,500). We also find evidence that the effect varies with distance within this range -- houses next to an offender sell for about 12 percent less while those a tenth of a mile away or more show no decline. We combine our willingness-to-pay estimates with data on sexual crimes against neighbors to estimate the costs to victims of sexual offenses. We estimate costs of over $1 million per victim -- far in excess of estimates taken from the criminal justice literature. However, we cannot reject the alternative hypotheses that individuals overestimate the risk posed by offenders or view living near an offender as having costs exclusive of crime risk.

download in pdf format
   (636 K)

email paper

A non-technical summary of this paper is available in the June 2006 NBER digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12253

Published: Linden, Leigh L. and Jonah Rockoff. “Estimates of the Impact of Crime Risk on Property Values from Megan’s Laws." American Economic Review 98, 3 (2008): 1103‐27.

Users who downloaded this paper also downloaded* these:
Brezina, Tekin, and Topalli w14279 "Might Not Be a Tomorrow": A Multi-Methods Approach to Anticipated Early Death and Youth Crime
Becker, Murphy, and Grossman w10976 The Economic Theory of Illegal Goods: The Case of Drugs
Arkes, Pacula, Paddock, Caulkins, and Reuter w14224 Why the DEA STRIDE Data are Still Useful for Understanding Drug Markets
Dyck, Morse, and Zingales w12882 Who Blows the Whistle on Corporate Fraud?
Prescott and Rockoff w13803 Do Sex Offender Registration and Notification Laws Affect Criminal Behavior?
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us