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Drugs on the Web, Crime in the Streets. The Impact of Shutdowns of Dark Net Marketplaces on Street Crime

Lookup NU author(s): Dr Diego Zambiasi

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This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).


Abstract

The Dark Net has changed the way drugs are traded globally by shifting trade away from the streets and onto the web. In this paper, I study whether the shutdown of Dark Net marketplaces has an impact on the amount of drugs traded in the streets and on crimes that are normally associated to street drug dealing. To identify a causal effect, I use daily data from the US and exploit unexpected shutdowns of large online drug trading platforms. In a regression discontinuity design, I compare crime levels in days after the shutdowns to those immediately preceding them. I find that shutting down Dark Net marketplaces leads to a significant increase in drug trade in the streets. However, the effect is short-lived. In the days immediately following shutdowns, marijuana-related crimes increase by around five percent but revert to pre-shutdown levels within eighteen days. I find no impact of shutdowns of Dark Net marketplaces on thefts, assaults, homicides and prostitution.


Publication metadata

Author(s): Zambiasi D

Publication type: Article

Publication status: Published

Journal: Journal of Economic Behavior & Organization

Year: 2022

Volume: 202

Pages: 274-306

Print publication date: 01/10/2022

Online publication date: 24/08/2022

Acceptance date: 06/08/2022

Date deposited: 18/10/2022

ISSN (electronic): 0167-2681

Publisher: Elsevier

URL: https://doi.org/10.1016/j.jebo.2022.08.008

DOI: 10.1016/j.jebo.2022.08.008


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