The Impact of Recreational Marijuana Dispensaries on Crime: Evidence from a Lottery Experiment

RESEARCH PAPERS ARE PRELIMINARY MATERIALS CIRCULATED TO STIMULATE DISCUSSION AND CRITICAL COMMENT. THE VIEWS EXPRESSED ARE THOSE OF THE INDIVIDUAL AUTHORS. WHILE RESEARCH PAPERS BENEFIT FROM ACTIVE UHERO DISCUSSION, THEY HAVE NOT UNDERGONE FORMAL ACADEMIC PEER REVIEW.

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 crime. Combining lottery data with detailed geocoded crime data, we estimate that the presence of a dispensary has no impact on average local crime rates. However, within low-income neighborhoods, we find an increase in property crime adjacent to new dispensaries.

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