What effect does gun-related violence have on the attractiveness of a residential area? The case of Stockholm, Sweden

This study aims to analyse the effect of gun-related violence on housing values, controlling for the area’s crime levels and locational factors. Using the regression discontinuity design method, we can estimate the short-term effects of shootings. Findings from our analysis indicate that shootings directly affect those who are impacted by shootings and indirectly affect the environments where shootings occur. The indirect effect of shootings is momentary, as it is capitalised directly in housing values in the immediate area. The effect also appears to be relatively long-term and persistent as housing values have not returned to the price level before the shooting 100-200 days after the shooting. The capitalisation effect is higher the closer one gets to the central parts of the city. On the other hand, the capitalisation effect is not higher or lower in areas with a higher crime rate per capita