Does Physical Housing Decay in Urban Areas Promote Crime?

This paper investigates the nexus between physically decayed urban areas and crimes. We incorporate the existing arguments concerning the nexus in a model to offer systematic economic accounts of the direct effect of physical decay on crimes. We also explain the aggravating effect of physical decay interacting with other critical human or environmental factors known to increase crimes such as lowered self-control and increased exposure. We introduce two proxies for urban physical housing decay. Using a panel of 52 South Korean cities for 11 years from 2005, we find that not only is the direct effect of physical housing decay significant but its aggravating effect is also fairly persistent.