Working Paper: NBER ID: w12253
Authors: Leigh L. Linden; Jonah E. Rockoff
Abstract: 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.
Keywords: Crime; Property Values; Sex Offender Registry; Megan's Law
JEL Codes: R2; K4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| presence of a sex offender (K42) | perceived crime risk (K42) |
| perceived crime risk (K42) | property values (R33) |
| costs to victims of sexual offenses (K13) | economic impact of crime (K42) |
| arrival of a sex offender (K42) | property values (R33) |
| arrival of a sex offender (K42) | houses within one-tenth mile radius (R21) |