The Effect of Crime on Residential Rents and Property Values: A Comment
Carroll, William J.
[Excerpt] In the Spring 1979 issue of this Journal, Mario J. Rizzo (8) presented an interesting quantitative analysis of the value placed by households on avoiding crime. He used a technique currently popular among researchers for estimating the value of a whole array of impacts which impinge upon property values. This note does not quarrel with the legitimacy of using such a technique for capturing household marginal willingness to pay for crime avoidance. Instead, it focuses on two questions about how Rizzo used the technique. First, should income be used, even as a proxy for other variables, in estimating an essentially reduced form equation which relates housing characteristics (quantity measurements) to their implicit prices? Second, if a liberal estimate of the value of crime avoidance is generated, why not a conservative one also?
crime; effect; residential rents; property values
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