| Abstract: |
We use hedonic price models to estimate the value households are willing to
pay to avoid violent crime in the city of Bogotá. We find that households
living in the highest socioeconomic level (stratum 6) pay up to 7.2% of their
house values in order to prevent average homicide rates from increasing in one
standard deviation. Households in stratum 5 pay up to 2.4% of their house
values to prevent homicide rates from increasing. The results indicate the
willingness to pay for security by households in Bogotá, and additionally,
reveal that a pure public good like security, ends up creating urban private
markets that auction security. These markets imply different levels of access
to public goods among the population, and actually, the exclusion of the
poorest. We find as well evidence of negative capitalization of the rate of
attacks against life, and positive capitalization of the presence of police
authority. |