Project overview
Overall crime rates in the UK have been steadily declining since the mid 1990s. In the past few years, however, the incidence of violent crime, and in particular murder, began to rise. Between July 2017 and June 2018 the number of homicides went from 630 to 719, a 14% increase - and a fourth year of consecutive rise - in the number of homicides. Against the backdrop of rising homicide counts, since 2010, police officer strength has declined by over 20,000 (full-time equivalent) officers - a drop of around 15%. Such a decline in police resources effectively underscores the importance of understanding the social costs of violent crime, in that such an understanding will better aid the allocation of these increasingly scarce resources. The primary aim of the project is to use a previously unexploited combination of existing crime data and survey/administrative data, supplemented with newly available house price data from Zoopla, to answer the following questions: 1.) How much does a recent murder affect house prices in the neighbourhood? Using well-established economic models, we will estimate households' willingness to pay to avoid violent crime risk. This is our key approach to measuring the financial cost of a recent, local murder. 2.) Are individuals' life satisfaction and perceptions of crime risk adversely affected by an unexpected violent crime event in the local area? Widening the scope of our research to incorporate these subjective measures enables us to provide a more comprehensive assessment of the societal costs of violent crime incidence. 3.) To what extent are subjective outcomes the mechanism at play behind house price changes? This final question is one of the key innovations of our unified approach, and is also the area where we effectively leverage the richness of the data that we combine. With the spatio-temporal detail of our data, we are able to discern the causal pathways of the key variables at play, and to understand to what extent changes in subjective well-being outcomes map into changes in house prices, and thus willingness to pay to avoid violent crime risk. This is crucial to both shed light on the complexities of the behavioural response of individuals to criminal events and to improve the design of policies that cope with the effects of crime. Our methodological approach is innovative in several dimensions. First, we merge existing data sources in an original way to create datasets with a unique combination of spatial and temporal detail. In particular, we merge murder statistics with two sources house price data and three different sources of survey data by contemporaneously exploiting the place (postcode) and time (day) of the crime event. This distinctive data combination enables us to use advanced econometric techniques, and a novel set of empirical strategies, to identify the causal impact of crime on a series of policy relevant outcomes. Second, focusing on murders - aside from being novel and timely - allows us to consider a type of crime that is unpredictable (within a locality) but at the same time perceptible. These characteristics help to circumvent fundamental methodological problems related to both the measurement of crime and the role of unobservable confounding factors, ultimately allowing us to produce compelling, credible estimates of the causal impact of crime. These estimates will be of interest to both academics and to policy makers. Obtaining a clean, causal estimate of the societal costs violent crime risk will be of use to the Ministry of Justice (MoJ) in their role of assessing the costs of crime. Our work will also be of interest to health economists at the Department of Health and Social Care (DHSC) and researchers at the Ministry of Housing, Communities & Local Government (MHCLG) in that we consider both a broad set of psychological costs of a recent violent crime, and how such costs are experienced by those within the local community.
