The Effect of Cocaine Prices on Crime

نویسندگان

  • JEFFREY DESIMONE
  • Jenny Hunt
  • John R. Lott
  • Kerry Anne McGeary
  • Paul Schultz
  • Jody Sindelar
چکیده

The relationship between cocaine prices and crime has critical implications for U.S. drug policy, but is theoretically indeterminate because changes in cocaine prices affect crime through changes in both cocaine consumption and expenditures. This paper investigates this relationship using annual data on 30 large U.S. cities from 1981 to 1995. I control for potential simultaneity by using two-stage least squares with measures of wholesale supply factors and retail enforcement intensity as instruments for the cocaine price. The results indicate that controlling for prices of other drugs, deterrence effects, socioeconomic determinants of crime, and both city and year-specific effects, a strong negative relationship exists between cocaine prices and six of seven FBI index crimes. (JEL D12, I18, K42)

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تاریخ انتشار 1999