Gentrification, Gun Violence, and Coordination Failure

In this study, I demonstrate the causal linkage between gentrification and gun violence. I develop a theoretical model of competition in the unregulated illegal drug market, and draw the conclusion that violence in the market is, in part, caused by the officially unenforceable nature of territorial claims. Exogenous shocks, such as gentrification, keep viable territory in a state of constant flux, preventing sustained cooperation between these illegal actors. I then specify a two-way fixed effects differences-in-differences estimator to empirically test the model's prediction that the gentrification of one block will lead to increases in violence across the surrounding neighborhood. I find a robust result, that some 5,800 (21%) of Philadelphia's shootings over the decade of this study's window can be attributed to spillover effects from gentrification. This effect is nearly ten times stronger, when it is a high drug crime block that gentrifies. This study further contributes a new easily replicable empirical measurement of gentrification drawn primarily from property sales, along with building, zoning, and alteration permit issuance. This new measurement is able to capture gentrification at its finest and most realistic resolution: the individual block level