The Cost of Gun Crime: Evidence from Gun Offender Registry on Housing Values

Abstract

In this study, we estimate the cost of gun crime using a revealed preference framework by relying on an institutional change in Baltimore City, Maryland, that mandates public disclosure of the gun offender registry. We exploit the sharp localized change in perceived crime risk after gun offenders move into the neighborhood and examine its impact on housing values in the vicinity. Our estimates indicate that houses closest to gun offenders experience 7.1% decline in value ($9,100) after the offenders move in, and the probability of sales is 43% lower. Collectively, public disclosure of a gun offender’s residence costs homeowners around $888 million. We construct a simple model to estimate the cost of gun victimization from these house price discounts. Based on our preferred specification, the cost of gun crime victimization is around $1.5 million and, assuming a 20% fatality rate, the value of statistical fife is approximately $9.0 million.