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Housing and Crime

How does one’s place of residence affect his criminal risk?

Crime data show that a lot more crimes take place in socially and economically disadvantaged neighborhoods than their more affluent counterparts. Is it because living in a disadvantaged neighborhood aggravates one’s criminal risk? What is the causal effect of living in a disadvantaged neighborhood on residents’ criminal risks?

As usual, research effort to investigate this problem is hampered by the selection problem. Residents in disadvantaged neighborhoods may be systematically different in their crime-relevant characteristics, and it is not clear how researchers can disentangle the effects on crime of the residential location choice from the effects of these other individual characteristics.

One potential remedy is to run a randomized experiment, in which comparable individuals are randomly assigned to neighborhoods with varying levels of crime and other socioeconomic disadvantages. But this seems even more unrealistic than the randomized policing experiment we saw earlier. Who is going to agree to live in a high crime neighborhood just because some researcher asks him to do so? However, a slightly modified version of this experiment actually takes place in real life. While it would be impossible to force an individual to live in a high-crime neighborhood against his will, it is a lot easier to induce a household living in a high-crime neighborhood to move to a low-crime neighborhood.

Consider the Moving-to-Opportunity (MTO) program, a large-scale housing assistance experiment sponsored by the U.S. Department of Housing and Urban Development (HUD). In 1994, the MTO program invited low-income households living in high-poverty neighborhoods to apply for housing vouchers, which could be used to rent apartments in more affluent neighborhoods. Approximately 4,600 families from five major U.S. cities, Baltimore, Boston, Chicago, Los Angeles, and New York, applied for the program. Applicants were then randomly assigned to one of the three groups: experimental, Section 8, and control. Families assigned to the experimental group received housing vouchers, on the condition that the vouchers would be used to rent a unit in low-poverty neighborhood. Those in the Section 8 group also received the vouchers, but they were allowed to use the vouchers in any neighborhood they liked. Lastly, those in the control group did not receive housing vouchers.

Economists Jeffrey Kling, Jens Ludwig, and Lawrence Katz analyzed the offending rates of children of the MTO participating families 4-7 years after the program. They observed that female youths assigned to the experimental group were 35 percent less likely to be arrested than those in the control group, but found little difference in the arrest rate among male program participants. Since male youths commit a lot more crimes than female youths, this finding casts doubt on the use of government-sponsored housing assistance as a viable crime-fighting tool.

How should we interpret this null result? One potential explanation is that an individual’s residential location has little to do with his criminal decision. Relatedly, most of the youths examined in this study were already in their teens at the time of the MTO randomization, and many male youths who relocated to low-poverty neighborhoods may have continued to spend time with their old friends from previous neighborhoods. In this case, the effect of the residential location on crime would have been muted.

The lack of significant crime-reducing effects of the MTO program was very much disappointing, given the huge cost of providing housing assistance to thousands of households. However, the MTO program seems to have brought in other important social gains. Researchers found that those who used the vouchers to move to low-poverty neighborhoods were significantly less likely to have diabetes, obesity, physical limitations and psychological distress than their unlucky counterparts 10-15 years after the program.


References:

  • Kling, Jeffrey R., Jens Ludwig, and Lawrence F. Katz. “Neighborhood Effects on Crime for Female and Male Youth: Evidence from a Randomized Housing Voucher Experiment.” Quarterly Journal of Economics (2005): 87-130.
  • Sanbonmatsu, Lisa, Nicholas A. Potter, Emma Adam, Greg J. Duncan, Lawrence F. Katz, Ronald C. Kessler, Jens Ludwig. “The Long-term Effects of Moving to Opportunity on Adult Health and Economic Self-sufficiency.” Cityscape (2012): 109-136.

Further Reading:

  • Wolfers, Justin. (May 4, 2015). Why the New Research on Mobility Matters: An Economist’s View. New York Times. Retrived from www.nytimes.com.

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Economics of Crime

Hanyang University

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