Do crime-prone areas attract gambling shops?: A case of London boroughs

Abstract

We investigate a causal effect of crime on the number of betting shops by using annual data from London boroughs (2007-2015). Using an instrumental variable strategy, we estimate a panel model accounting for omitted variables and borough-level heterogeneity. Our estimation results show that a 1% increase in crime rate causes a 1.2% increase in the number of betting shops (per capita). Put differently, a new betting shop opens in a borough for every 1.4% increase in the local crime rate, on average. The causal effect is robust across a variety of specifications, although the magnitude varies across models.

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