“Drugs on the Web, Crime in the Streets: The Impact of Dark Web Marketplaces on Street Crime”, 2020-09-18 ():
The Dark Web 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 Dark Web has an impact on street crime, a common side effect of traditional drug trade.
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 rates in days after the shutdowns to those immediately preceding them.
I find that shutting down Dark Web markets leads to a statistically-significant increase in drug trade in the streets. However, the effect is short-lived. In the days immediately following shutdowns, drug-related crimes increase by 5 to almost 10% but revert to pre-shutdown levels within 10 days. I find no impact of shutdowns of Dark Web marketplaces on thefts, assaults, homicides, and prostitution.