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The impact of crime on apartment prices: evidence of Stockholm, Sweden

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  • Vania Ceccato
  • Mats Wilhemson

Abstract

This study uses data over 9600 apartment sales in Stockholm, Sweden, to assess the impact of crime on property prices. Using two-stage analysis, the study first employs hedonic pricing modelling to estimate the impact of crime controlling for other factors (property and neighbourhood characteristics). Then, the willingness to pay is calculated for a certain property having as a function crime together with other house and area attributes. GIS is used to combine apartment sales by co-ordinates with offences, land use characteristics and demographic and socio-economic data of the population. The novelty of this research is threefold. First, it explores a set of land use attributes created by spatial techniques in GIS in combination with detailed geographical data in hedonic pricing modelling. Second, the effect of crime in neighboring zones at one place can be measured by incorporating spatial lagged variables of offence rates into the model. Third, the study provides evidence of the impact of crime on housing prices from a capital city from a welfare state country, something otherwise lacking in the international literature. Our results indicate that total crime rates showed no effect on apartment prices but when the offences were break down by types, violence, residential burglary, vandalism and robbery had individually a significant effect on property values.

Suggested Citation

  • Vania Ceccato & Mats Wilhemson, 2011. "The impact of crime on apartment prices: evidence of Stockholm, Sweden," ERSA conference papers ersa10p1026, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa10p1026
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper1026.pdf
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    Cited by:

    1. Jonas Eliasson & Fredrik Kopsch & Svante Mandell & Mats Wilhelmsson, 2020. "Transport Mode and the Value of Accessibility–A Potential Input for Sustainable Investment Analysis," Sustainability, MDPI, vol. 12(5), pages 1-14, March.
    2. Brunes, Fredrik & Hermansson, Cecilia & Song, Han-Suck & Wilhelmsson, Mats, 2016. "NIMBYs for the rich and YIMBYs for the poor: Analyzing the property price effects of infill development," Working Paper Series 16/2, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    3. Mats Wilhelmsson, 2019. "Energy Performance Certificates and Its Capitalization in Housing Values in Sweden," Sustainability, MDPI, vol. 11(21), pages 1-16, November.
    4. Piotr Czembrowski & Edyta Łaszkiewicz & Jakub Kronenberg & Gustav Engström & Erik Andersson, 2019. "Valuing individual characteristics and the multifunctionality of urban green spaces: The integration of sociotope mapping and hedonic pricing," PLOS ONE, Public Library of Science, vol. 14(3), pages 1-16, March.
    5. Foryś Iwona & Putek-Szeląg Ewa, 2017. "The Impact Of Crime On Residential Property Value - On The Example Of Szczecin," Real Estate Management and Valuation, Sciendo, vol. 25(3), pages 51-61, September.
    6. Melek Cigdem‐Bayram & David Prentice, 2019. "How Do Crime Rates Affect Property Prices?," The Economic Record, The Economic Society of Australia, vol. 95(S1), pages 30-38, June.
    7. Alejandro Norton & Marcos Herrera-Gomez, 2020. "Una propuesta de medición de daño del delito y su impacto sobre los precios de Airbnb en la Ciudad de Buenos Aires," Asociación Argentina de Economía Política: Working Papers 4358, Asociación Argentina de Economía Política.
    8. David M. Vetter & Kaizô I. Beltrão & Rosa M. R. Massena, 2013. "The Impact of the Sense of Security from Crime on Residential Property Values in Brazilian Metropolitan Areas," Research Department Publications IDB-WP-415, Inter-American Development Bank, Research Department.
    9. Riccardo Novaro & Massimiliano Piacenza & Gilberto Turati, 2022. "Does money laundering inflate residential house prices? Evidence from the Italian provincial markets," Kyklos, Wiley Blackwell, vol. 75(4), pages 672-691, November.
    10. Arthur Acolin & Rebecca J. Walter & Marie Skubak Tillyer & Johanna Lacoe & Raphael Bostic, 2022. "Spatial spillover effects of crime on private investment at nearby micro-places," Urban Studies, Urban Studies Journal Limited, vol. 59(4), pages 834-850, March.
    11. Andrés Domínguez, 2021. "Homicide rates and housing prices in Cali and Bogotá, D. C," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 40(83), pages 643-677, August.
    12. Awaworyi Churchill, Sefa & Smyth, Russell & Trinh, Trong-Anh & Yew, Siew Ling, 2022. "Local crime and fertility," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 312-331.

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