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The Cost of Avoiding Crime: The Case of Bogotá

The Cost of Avoiding Crime: The Case of Bogotá

Chapter:
(p.101) 3 The Cost of Avoiding Crime: The Case of Bogotá
Source:
The Economics of Crime
Author(s):
Alejandro GaviriaCarlos MedinaLeonardo MoralesJairo Núñez
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226153766.003.0004

This chapter tackles the difficult problem of estimating the full cost of crime, given that these costs typically exceed the value of the lost property, researchers have developed general measures that are typically of two types, that is, either a global measure that is based on an evaluation of well-being or a measure that uses prices that incorporate all the available information. This chapter uses the second approach of a measure that uses prices that incorporate all the available information. This approach is based on hedonic price models, where disamenities like crime are built into real estate market prices. This chapter exploits the fact that households in the city of Bogotá are willing to pay considerable amounts to avoid violent crime.

Keywords:   crime, costs, lost property, global measure, prices, hedonic price models, market prices, real estate, Bogotá

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