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The Cost of Avoiding Crime: The Case of Bogot�

Author

Listed:
  • Alejandro Gaviria
  • Carlos Medina
  • Leonardo Morales
  • Jairo Nu�ez
Abstract
We use hedonic price models to estimate the value households are willing to pay to avoidviolent crime in the city of Bogot�. We find that households living in the highestsocioeconomic level (stratum 6) pay up to 7.2% of their house values in order to preventaverage homicide rates from increasing in one standard deviation. Households in stratum 5pay up to 2.4% of their house values to prevent homicide rates from increasing. The resultsindicate the willingness to pay for security by households in Bogot�, and additionally,reveal that a pure public good like security, ends up creating urban private markets thatauction security. These markets imply different levels of access to public goods among thepopulation, and actually, the exclusion of the poorest. We find as well evidence of negativecapitalization of the rate of attacks against life, and positive capitalization of the presenceof police authority.

Suggested Citation

  • Alejandro Gaviria & Carlos Medina & Leonardo Morales & Jairo Nu�ez, 2008. "The Cost of Avoiding Crime: The Case of Bogot�," Borradores de Economia 4600, Banco de la Republica.
    • Handle: RePEc:col:000094:004600
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Carlos Medina & Jorge Andrés Tamayo, 2011. "An Assessment of How Urban Crime and Victimization Affects Life Satisfaction," Borradores de Economia 640, Banco de la Republica de Colombia.
    2. 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.
    3. Leonardo Fabio Morales, 2015. "Peer Effects on a Fertility Decision: an Application for Medellín, Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 119-159.
    4. Fernando Chavarro, Jazmín Balaguer Manfred Grautoff, 2010. "Torneo criminal, aversión al riesgo y seguridad ciudadana: comportamiento criminal en Bogotá D.C," Revista CIFE, Universidad Santo Tomás.
    5. Alejandro Gaviria & Carlos Medina & Jorge Andres Tamayo, 2010. "Assessing the Link between Adolescent Fertility and Urban Crime," Borradores de Economia 594, Banco de la Republica de Colombia.
    6. Enrique Javier Burbano Valencia & María Isabel Zafra Sanz, 2017. "Homicidio y precios de la tierra: un análisis espacial en Santiago de Cali," Cuadernos de Economía - Spanish Journal of Economics and Finance, Asociación Cuadernos de Economía, vol. 40(113), pages 147-159, Mayo.
    7. Carlos Medina & Leonardo Morales & Jairo Nu�ez, 2008. "Quality of Life in Urban Neighborhoods in Colombia:The Cases of Bogot� and Medell�n," Borradores de Economia 5126, Banco de la Republica.

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    Keywords

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    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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