Research: When A Retail Store Closes, Crime Increases Around It

From Boston to Los Angeles, “mixed use” development, combining residential and commercial properties, is on the rise. The benefits that have been cited for colocating housing and retail establishments include reduced travel distances, more-pedestrian-friendly neighborhoods, and stronger local character. Recent research suggests another important potential benefit: Retail establishments may play an important role in crime prevention. In our research, we examined the effect on crime of temporarily shuttering two types of retail businesses: medical marijuana dispensaries (MMDs) and restaurants. Why study dispensaries? In 2010 Los Angeles initiated a mass closing of two-thirds of the dispensaries in the city. The fact that the closings were based on a very arbitrary registration process that took place several years prior allowed us to use the closings as a natural experiment to estimate the causal impact of MMDs on crime. Surprisingly, we discovered that the closures were associated with a significant increase in crime in the blocks immediately surrounding a closed dispensary, compared with the blocks around dispensaries allowed to remain open. Our results demonstrated that the dispensaries were not the crime magnets that they were often described as, but instead reduced crime in their immediate vicinity. And when breaking down the effect by types of crime, we found that the increases in crime after dispensary closures were driven by the types of crime most plausibly deterred by bystanders: property crime and theft from vehicles. But our interest was in the effect of retail businesses on crime in general, not just in what happens when MMDs closed. We wondered: Would we observe the same dynamic in another retail context? Read more at Harvard Business Review.