Gated Communities and the Economic Geography of Crime

Abstract

This paper analyzes gated communities in a geographic model of crime. There are four major results. First, gating always diverts crime to other communities but has an overall deterrent effect on crime as long as it does not impact legitimate employment opportunities. Second, gating expenditures may be strategic substitutes or strategic complements. The latter possibility may help explain why gated communities appear to spread like a contagion. Third, the Nash equilibrium level of gating expenditures is inefficiently large. Fourth, gating may actually increase the overall level of crime if it either affects employment opportunities or it influences the selection among multiple equilibrium crime rates.