Crime and Residential Choice: A Neighborhood Level Analysis of the Impact of Crime on Housing Prices

  • George E. Tita
  • Tricia L. Petras
  • Robert T. Greenbaum
Original paper


Crime serves as an important catalyst for change in the socio-economic composition of communities. While such change occurs over a long period of time, crime is capitalized into local housing markets quickly and thus provides an early indicator of neighborhood transition. Using hedonic regression, we quantify this “intangible cost” of crime and extend the crime-housing price literature in several important ways. First, we disaggregate crime to the census tract level. Second, using longitudinal data, we examine changes in crime in addition to the neighborhood levels of crime. Third, we differentiate between the effects of property crime and violent crime. Fourth, we also disaggregate our sample into groups based on per capita income of the census tract. Finally, we show that it is vital to account for the measurement error that is endemic in reported crime statistics. We address this with an instrumental variable approach. Our results indicate that the average impacts of crime rates on house prices are misleading. We find that crime is capitalized at different rates for poor, middle class and wealthy neighborhoods and that violent crime imparts the greatest cost.


Housing markets Neighborhood transition Hedonic modeling Costs of crime 



The authors gratefully acknowledge funding support from the National Consortium on Violence Research (NCOVR is supported under Grant SBR 9513040 from the National Science Foundation) and the Department of Housing and Urban Development. They also thank the Criminal Justice Research Center and the Center for Urban and Regional Analysis at Ohio State University for sharing crime and housing data. They greatly appreciate feedback on earlier drafts from Marlon Boarnet, Richard Green, Georgette Poindexter, three anonymous referees, and the editor of JQC. All errors and omissions are the sole responsibility of the authors.


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Copyright information

© Springer Science+Business Media, Inc. 2006

Authors and Affiliations

  • George E. Tita
    • 1
  • Tricia L. Petras
    • 2
  • Robert T. Greenbaum
    • 2
  1. 1.UC Irvine Criminology, Law and SocietyIrvineUSA
  2. 2.John Glenn School of Public AffairsThe Ohio State UniversityColumbusUSA

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