The Economic Impact of Violent Crime on Local Retail Performance

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Key Points

This research aims to empirically analyze how changes in perceived risk due to violent crime affect local retail sales through spatial avoidance behavior.
Utilized administrative panel data from Seoul's commercial area analysis service.
Implemented synthetic control method to establish counterfactual sales paths before a violent crime incident.
Conducted placebo tests to confirm robustness of the findings.
Total sales in the Shinlim-dong commercial area significantly decreased following the crime incident.
The decline in sales was particularly pronounced among women and consumers in their 20s, who perceived higher levels of risk.
Retail sectors closely tied to daily living experienced more substantial sales declines than those less connected.

Randomized analysis reveals the impact of violent crime on retail sales in a local area, suggesting strategies for recovery.

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Hong et al. (2026) studied this question.

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