Not in my backyard? Not so fast. The effect of marijuana legalization on neighborhood crime

Authors

Abstract

This paper studies the effects of marijuana legalization on neighborhood crime and documents the patterns in retail dispensary locations over time using detailed micro-level data from Denver, Colorado. To account for endogenous retail dispensary locations, we use a novel identification strategy that exploits exogenous changes in demand across different locations arising from the increased importance of external markets after the legalization of recreational marijuana sales. The results imply that an additional dispensary in a neighborhood leads to a reduction of 17 crimes per month per 10,000 residents, which corresponds to roughly a 19 percent decline relative to the average crime rate over the sample period. Reductions in crime are highly localized, with no evidence of spillover benefits to adjacent neighborhoods. Analysis of detailed crime categories provides insights into the mechanisms underlying the reductions.

Keywords

Legalization
Drugs
Crime
Policy evaluation

JEL classification

I18

R50
H73
Marijuana Moment  write some good commentary and analaysis
Although the study found that the anti-crime effects of marijuana retail operations are “highly localized, with no evidence of spillover benefits to adjacent neighborhoods,” the authors suggested it is reasonable to infer that the reductions in crime associated with nearby dispensaries add up to city-wide benefits.
https://www.marijuanamoment.net/crime-rates-drop-after-marijuana-dispensaries-open-nearby-study-finds/