The link between crime risk and property prices in England and Wales: Evidence from street-level data

Abstract

This paper uses street-level data on property sales and crime rates for England and Wales to investigate compensating differentials for crime risk. My identification strategy relies on the use of non-parametric regional time trends on various levels of spatial aggregation as well as various fixed effects for streets and wider areas to control for unobserved amenities and regional economic conditions. The data comes from transaction data collected by the land registry and recently published crime maps for the whole of the UK. My estimates, which are robust to a range of sensible specification changes, suggest that each case of anti-social behaviour per ten population in the same street leads to an approximately 0.6–0.8% drop in property prices, while a corresponding increase in violent crime decreases prices by roughly 0.6–1.6% and a corresponding increase in non-violent crime by about 0.2–0.4%. The majority of estimates are at the upper end of these intervals. Estimates for robbery, burglary and vehicle crime are either zero or positive, but are possibly biased because of reverse causality. Crime outside of the respective street does not appear to matter, which is consistent with earlier findings. Expressed in monetary terms each case of anti-social behaviour costs society between £5000 and £6700 and each violent crime between £5000 and £13,300. The results confirm estimates based on prior willingness-to-pay studies and other studies using smaller areas such as single cities.