Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/60949
Authors: 
Frischtak, Claudio
Mandel, Benjamin R.
Year of Publication: 
2012
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 542
Abstract: 
We use a recent policy experiment in Rio de Janeiro, the installation of permanent police stations in low-income communities (or favelas), to quantify the relationship between a reduction in crime and the change in the prices of nearby residential real estate. Using a novel data set of detailed property prices from an online classifieds website, we find that the new police stations (called UPPs) had a substantial effect on the trajectory of property values and certain crime statistics since the beginning of the program in late 2008. We also find that the extent of inequality among residential prices decreased as a result of the policy. Both of these empirical observations are consistent with a dynamic model of property value in which historical crime rates have persistent effects on the price of real estate.
Subjects: 
wealth distribution
amenity value
real estate
JEL: 
O18
O15
R30
K42
Document Type: 
Working Paper

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