Download This PaperThe Price of Obscenity in Housing Markets: Evidence from Closing Prostitution Windows
Giambona, E. and Ribas, R. P. (2023), Unveiling the Price of Obscenity: Evidence from Closing Prostitution Windows in Amsterdam. Journal of Policy Analysis and Management. https://doi.org/10.1002/pam.22459
65 Pages Posted: 29 Jun 2017 Last revised: 6 Mar 2023
Date Written: October 18, 2021
Abstract
This paper examines the relationship between housing demand and overt prostitution in Amsterdam. In our empirical design, we exploit the spatial discontinuity in the location of brothel windows created by canals. To pin down their effect on housing prices, we apply a difference-in-discontinuity estimator combined with the forced closure of brothels near the canals. Our results indicate that the shorter the distance to brothels, the greater the change in price discontinuity after their closure. Homes right next to sex workers are found to be 30% cheaper. This effect is partly explained by petty crimes, but 73% of the effect remains unexplained. Our findings suggest that households tend to be against the visible presence of sinful businesses.
Keywords: Prostitution, Disamenity, Housing Prices, Spatial Regression Discontinuity, Social Discount
JEL Classification: C31, H43, K42, L83, R21
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