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American Economic Journal: Applied Economics: Vol. 5 No. 4 (October 2013)

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Deterrence and Geographical Externalities in Auto Theft

Article Citation

Gonzalez-Navarro, Marco. 2013. "Deterrence and Geographical Externalities in Auto Theft." American Economic Journal: Applied Economics, 5(4): 92-110.

DOI: 10.1257/app.5.4.92

Abstract

Understanding the degree of geographical crime displacement is crucial for the design of crime prevention policies. This paper documents changes in automobile theft risk that were generated by the plausibly exogenous introduction of Lojack, a highly effective stolen vehicle recovery device, into a number of new Ford car models in some Mexican states, but not others. Lojack-equipped vehicles in Lojack-coverage states experienced a 48 percent reduction in theft risk due to deterrence effects. However, 18 percent of the reduction in thefts was displaced toward unprotected Lojack models in non-Lojack states, providing new evidence of geographical crime displacement in auto theft.

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Authors

Gonzalez-Navarro, Marco (U Toronto)

JEL Classifications

H76: State and Local Government: Other Expenditure Categories
H77: Intergovernmental Relations; Federalism; Secession
K42: Illegal Behavior and the Enforcement of Law
O17: Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O18: Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
R23: Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics

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