A Two-Stage Model of the Simultaneous Relationship Between Retail Development and Crime

Abstract

This study looks at crime as one potential obstacle to the revitalization of downtown retail areas. High crime in central city neighborhoods may discourage retail development, either because crime against the establishment increases business costs or because crime and the fear of crime drive away potential customers. This study uses a two-equation system to address two seemingly conflicting hypotheses: that crime discourages retail development and that retail development attracts crime. The results of this study have implications for downtown redevelopment strategies. If higher crime does significantly reduce retail development, then no matter what type of programs are implemented to encourage new retail businesses in downtown areas, they may not be effective if there is not also an adequate effort to reduce violent crime.