Working Paper Series, Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin), Royal Institute of Technology
Challenging the idyll: Does crime affect property prices in small towns?
() and Mats Wilhelmsson
Abstract: This article reports on testing the effect of residential
burglary on the housing market in a relatively small Swedish town using
data on sales in 2005 and 2011. This assessment is important since the
international evidence is dominated by studies based on large urban areas.
The study employs different strategies of hedonic price modelling to
estimate the impact of crime while controlling for property and
neighbourhood characteristics; in particular, it explores the use of
quantile regression. Geographic Information System (GIS) is used to combine
apartment sales data with residential burglaries, land use characteristics
and demographic data. Findings show that residential burglary has a
significant negative effect on property prices in 2011 but no impact in
2005. Results also show that the effect of housing characteristics on
apartment prices can be explained more in detail by estimating quantile
regression models across price categories than using traditional modelling
Keywords: Residential burglary; apartment prices; hedonic modelling; quantile regression; GIS; (follow links to similar papers)
JEL-Codes: R21; R32; (follow links to similar papers)
21 pages, August 23, 2013
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