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How bad is crime for business? Evidence from consumer behavior

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  • Fe, Hao
  • Sanfelice, Viviane

Abstract

Understanding how consumers respond to crime offers evidence of how safety perception impacts individuals daily choices and has important implications for economic development of communities. This paper investigates the impact of local crime on subsequent consumer visits to food and entertainment retails using a novel longitudinal dataset with point-specific crime and consumer visit data. We leverage the richness of our data to account for unobserved heterogeneity and time variant confounders through temporal and geographical variation. Our results show that consumers respond more strongly to property and street crimes. The response concentrates on the venue visit decision rather than the intensity of consumption (i.e. duration) in the venue.

Suggested Citation

  • Fe, Hao & Sanfelice, Viviane, 2022. "How bad is crime for business? Evidence from consumer behavior," Journal of Urban Economics, Elsevier, vol. 129(C).
    • Handle: RePEc:eee:juecon:v:129:y:2022:i:c:s0094119022000250
    DOI: 10.1016/j.jue.2022.103448
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    Cited by:

    1. Drydakis, Nick, 2024. "Business Disruptions Due to Social Vulnerability and Criminal Activities in Urban Areas," IZA Discussion Papers 17321, Institute of Labor Economics (IZA).
    2. Porreca, Zachary, 2024. "Identifying the General Equilibrium Effects of Narcotics Enforcement," GLO Discussion Paper Series 1455, Global Labor Organization (GLO).
    3. Gelvez, Juan David, 2024. "Does Crime Matter? The Politics of Crime Prevention in Colombia," OSF Preprints znyq5, Center for Open Science.
    4. Donovan, Stuart & de Graaff, Thomas & de Groot, Henri L.F. & Schiff, Aaron, 2024. "An urban overhead? Crime, agglomeration, and amenity," Journal of Housing Economics, Elsevier, vol. 64(C).
    5. Carl Hase & Johannes Kasinger, 2024. "The Pass-through of Retail Crime," Papers 2407.07201, arXiv.org, revised Oct 2024.
    6. Awaworyi Churchill, Sefa & Hayward, Mathew & Smyth, Russell & Trinh, Trong-Anh, 2023. "Crime, community social capital and entrepreneurship: Evidence from Australian communities," Journal of Business Venturing, Elsevier, vol. 38(2).
    7. Johnson, Josiah & Smith, Rhet A., 2023. "Main street business initiatives and crime in small towns," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 91-112.
    8. Dhaval Dave & Drew McNichols & Joseph J. Sabia, 2022. "Political violence, risk aversion, and population health: Evidence from the US Capitol riot," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(4), pages 1345-1384, October.
    9. Drydakis, Nick, 2024. "Business Disruptions Due to Social Vulnerability and Criminal Activities in Urban Areas," GLO Discussion Paper Series 1495, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Foot-traffic; Neighborhood; Safegraph; Venue; Violence; Visit;
    All these keywords.

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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