Work

Dismantling a market for stolen goods: Evidence from the regulation of junkyards in Brazil

Year: 2025

Type: article

Abstract: This paper investigates the impact of monitoring and market regulation on the illicit market for stolen goods, focusing on the association between junkyards and auto theft. I explore the effects of a state-level regulation implemented in São Paulo in 2014, which enhanced supervision of the market for auto parts. I find an 8.11% decline in auto theft for municipalities presenting at least one junkyard specialized in auto parts compared to the control group. Additionally, I provide evidence of a meaningful decrease in vehicle insurance prices, suggesting tangible economic benefits for citizens as a result of lower crime rates. These findings offer crucial insights into market regulation as a crime deterrence strategy to reduce the trade of stolen goods, highlighting its complementarity with traditional public security policies.

Source: Journal of Development Economics

DOI: 10.1016/j.jdeveco.2025.103497

Author: Andre Mancha

Institution: Insper

Language: English

Topic: Crime, Illicit Activities, and Governance

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Sustainable cities and communities, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $4,590