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Lookup NU author(s): Dr Diego Zambiasi
This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
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.
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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