Does the Burglar Also Disturb the Neighbor ? Crime Spillovers on Individual Well - being # 540

Indirect psychological eff ects induced by crime are likely to contribute signifi cantly to the total costs of crime beyond the fi nancial costs of direct victimization. Using detailed crime statistics for the whole of Germany and linking them to individual-level mental health information from the German Socio-Economic Panel, we analyze whether local crime rates aff ect the mental health of residents. We estimate that a one standard deviation increase in local violent crime rates signifi cantly decreases individual mental well-being among residents by, on average, one percent. Smaller eff ects are found for property and total crime rates. Results are insensitive to migration and not isolated to urban areas, but are rather driven by less densely populated regions. In contrast to previous literature on vulnerability to crime, we fi nd that men, more educated and singles react more to variation in violent crime rates in their neighborhoods. One potential explanation could be that those who are more fearful of crime have developed better coping strategies and, hence, react less to changes in crime. JEL Classifi cation: C23, I18, K42, R23