Research

From 2005 to 2019, forty US states increased the dollar value threshold delineating misdemeanor and felony theft, reducing the expected punishment for a subset of property crimes. Using an event study framework, we observe significant and growing increases in theft after a state reform is passed. We then show that reduced sanctions for theft have broader effects in the market for illegal activity. Consistent with a mechanism of substitution across income-generating crimes, we find decreases in both drug distribution crimes and the probability that a released offender previously convicted of drug distribution is reincarcerated for a new drug conviction.

We study how a sharp expansion in Colombian cocaine production propagated internationally through global trade networks, generating substantial social costs. In Colombia, the production surge increased homicide rates by 41% in port areas and by 26% in cocaine-producing municipalities. Violence then spilled across the border into Ecuador, a transit hub with negligible cocaine production but dense maritime trade links, contributing to a nearly five-fold increase in homicide rates. The shock traveled through criminal supply chains that exploit legitimate perishable export routes, notably bananas, concentrating activity at maritime chokepoints. In Europe, countries with stronger pre-shock trade ties to Colombia and Ecuador experienced sharp increases in cocaine seizures linked to these origins, lower retail prices, a 60% rise in cocaine consumption in port cities, and 5% higher violent crime in port provinces. Together, these results show that shocks in illicit markets propagate internationally through the same trade networks as legal trade shocks, concentrating violence at contested logistical bottlenecks and expanding downstream drug markets.

We show that drug product characteristics determine which markets are vulnerable to supply-side shocks that drive overdose mortality. White powder heroin can be more easily adulterated and attain higher purity than black tar heroin, leaving white powder markets uniquely exposed. Beginning in 2012, white powder markets experienced increases in purity and fentanyl adulteration. Exploiting pre-existing differences in heroin market types, we estimate that these shocks increased overdose death rates by 50 percent, implying 32,000 excess deaths across fourteen markets. These findings revise prior interpretations of the opioid epidemic’s heroin wave and explain why fentanyl mortality rose disproportionately in eastern markets.

We provide novel evidence on the social spillovers of homeownership by exploiting the recent rise of institutional investors purchasing single-family homes and converting them into permanent rentals. Using a granular difference-in-differences design based on proximity to each investor-purchased property, we find that neighboring property values decline by 1% relative to those slightly farther away. This decline grows over time yet decays across space, and these same properties experience increases in crime and decreases in property maintenance and voter registration. Supplemental analysis suggests these externalities arise from both landlord practices and tenant composition.