Working Paper: CEPR ID: DP10707
Authors: Bruno Decreuse; Steeve Mongrain; Tanguy Van Ypersele
Abstract: We model the allocation of property crime and private protection within cities. We provide a theory where city-specific criminals choose a neighborhood and whether they pay a search cost to compare potential victims, whereas households invest in self-protection. The model features strategic complementarity between criminals' search efforts and households' protection investments. As criminals' return to search increases with neighborhood wealth, households in rich neighborhoods are more likely to enter a rat race to ever greater protection that drives criminals towards poorer areas. The mechanisms of our model are tested with the Canadian General Social Survey. Household protection increases with household and neighborhood incomes, neighborhood protection, and neighborhood victimization.
Keywords: Economics of Crime; Private Protection; Search Frictions; Social Multiplier
JEL Codes: K14; K42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| wealth of a neighborhood (R20) | search efforts of criminals (K42) |
| search efforts of criminals (K42) | protection investments made by households (D14) |
| wealth of a neighborhood (R20) | protection investments made by households (D14) |
| protection investments made by households (D14) | likelihood of criminals being attracted to poorer neighborhoods (K42) |
| households in rich neighborhoods (R20) | higher likelihood of being victimized (K42) |
| household income (D19) | probability of having an alarm (C11) |
| neighborhood victimization (R23) | probability of having an alarm (C11) |