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The Annals of Regional Science

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01-10-2023 | Original Paper

The impact of recreational marijuana dispensaries on crime: evidence from a lottery experiment

Authors: Xiuming Dong, Justin Tyndall

Published in: The Annals of Regional Science | Issue 4/2024

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Abstract

Many North American jurisdictions have legalized the operation of recreational marijuana dispensaries. A common concern is that dispensaries may contribute to local crime. Identifying the effect of dispensaries on crime is confounded by the spatial endogeneity of dispensary locations. Washington State allocated dispensary licenses through a lottery, providing a natural experiment to estimate the causal effect of dispensaries on neighborhood-level crime. Combining lottery data with detailed geocoded crime data, we estimate that the presence of a dispensary has no significant impact on local crime in the average neighborhood. We estimate a small rise in property crime in low-income neighborhoods specifically.

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The federal government regulates drugs through the Controlled Substances Act (21 U.S.C. §811), which does not recognize the difference between the medical and recreational use of marijuana.

“Marijuana producer” means a person licensed by the WSLCB to produce and sell marijuana at wholesale to marijuana processors and other marijuana producers. “Marijuana processor” means a person licensed by the WSLCB to process marijuana into usable marijuana and marijuana-infused products, package and label usable marijuana and marijuana-infused products for sale in retail outlets, and sell usable marijuana and marijuana-infused products at wholesale to marijuana retailers. “Marijuana retailer” means a person licensed by the WSLCB to sell usable marijuana and marijuana-infused products in a retail outlet.

Rape incidents constitute only 0.2% of reported crimes within jurisdictions in our sample where data is available.

To further clarify the calculation of \(D_{it}^d\) and \(W_{it}^d\) in cases where treatment circles overlap, we provide an example in Fig. 8.

We allow \(D_{it}^d\) and \(W_{it}^d\) to exceed one in order to capture treatment intensity. The choice implies that the partial effect of being treated by two dispensaries is twice that of being treated by a single dispensary. We test robustness to alternate constructions of \(D_{it}^d\) and \(W_{it}^d\) in Table 14 and find results are consistent.

We test for finite sample bias by estimating the Cragg–Donald Wald F statistic. We estimate the F statistic at over 500 for all treatment radii, strongly rejecting the presence of significant bias.

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Title: The impact of recreational marijuana dispensaries on crime: evidence from a lottery experiment
Authors: Xiuming Dong
Justin Tyndall
Publication date: 01-10-2023
Publisher: Springer Berlin Heidelberg
Published in: The Annals of Regional Science / Issue 4/2024
Print ISSN: 0570-1864
Electronic ISSN: 1432-0592
DOI: https://doi.org/10.1007/s00168-023-01246-x

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