Local Economic Investment and Crime: Neighborhood Change in Washington, DC

Abstract

The purpose of this analysis is to shed light on the relationship between large-scale economic investment and crime in Washington, DC neighborhood clusters (N=39) from 2001 to 2007. Using panel data and a two-way fixed effects analytic strategy, results indicate that investment in large scale economic development projects (in millions of dollars) and crime rates (per 1,000) are inversely related controlling for disadvantage and time effects. Further analyses indicate that the relationship is dependent on a number of investment related factors, including major use of investment project (e.g. industrial, retail), financing source (public versus private), construction type (new versus renovation), as well as outcome variable (i.e. violent versus property crime). Residential investment has the strongest and most consistent relationship with both violent and property crime suggesting that the changes which accompany residential investment may be responsible for reduced crime. Theoretical mechanisms and future research directions are discussed.