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Drugs on the Web, Crime in the Streets - The Impact of Dark Web Marketplaces on Street Crime

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  • Diego Zambiasi

Abstract

The Dark Web has changed the way drugs are traded globally by shifting trade away from the streets and onto the web. In this paper, I study whether the Dark Web has an impact on street crime, a common side effect of traditional drug trade. To identify a causal effect, I use daily data from the US and exploit unexpected shutdowns of large online drug trading platforms. In a regression discontinuity design, I compare crime rates in days after the shutdowns to those immediately preceding them. I find that shutting down Dark Web markets leads to a significant increase in drug trade in the streets. However, the effect is short-lived. In the days immediately following shutdowns, drug-related crimes increase by five to almost ten percent but revert to pre-shutdown levels within ten days. I find no impact of shutdowns of Dark Web marketplaces on thefts, assaults, homicides and prostitution.

Suggested Citation

  • Diego Zambiasi, 2020. "Drugs on the Web, Crime in the Streets - The Impact of Dark Web Marketplaces on Street Crime," Working Papers 202025, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:202025
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    File URL: http://hdl.handle.net/10197/11645
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    References listed on IDEAS

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    More about this item

    Keywords

    Dark web; Darknet markets; Drugs; Crime;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • K24 - Law and Economics - - Regulation and Business Law - - - Cyber Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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