WARNING: MINOR SPOILER ALERT
In the latest episode of Breaking Bad, we learn that the family home of meth kingpin Walter White is being sold at police auction.
Carol, their neighbour, can’t be happy.
Thanks to a recent study, we can actually quantify her displeasure.
In his 2011 paper, “The Lasting Effects of Crime: The Relationship of Discovered Methamphetamine Laboratories and Home Values,” Holy Cross econ professor Joshua Congdon-Hohman calculates how much damage meth labs cause to surrounding home values after they’re discovered.
Although Walter White, aka Heisenberg, wasn’t running a lab directly out of his home, it’s safe to say its newfound association with his activities create similar conditions.
We can also expand the paper’s findings to Jesse Pinkman’s first home, where he and Heisenberg had set up a lab; as well as Gus Fring’s massive operation beneath a laundry, which Heisenberg burnt down.
Using housing sales data from Akron, Ohio — home to that state’s largest concentration of meth labs — Congdon-Hohman finds the following:
- For homes sold within an eighth of a mile after a lab is discovered, there is a 10.5% decline in sales prices.
- Within the first year of the discovery the decline can be as much as 19%.
- For homes sold within a quarter of a mile after a lab is discovered, there is a 4.5% decline.
- The declines persist for at least two years.
- It didn’t matter if an additional meth lab was discovered — just a single busted cook site can take down several blocks.
Here’s the chart:
It turns out that home values within one-sixteenth of a mile of the lab don’t show tremendous changes pre- and post-bust.
That is presumably because, at such a close distance, the presence of the lab may be better known, Congdon-Hohman says.
Still, since meth labs are often better concealed than other types of illicit activity run out of homes, their presence may not be as obvious to someone living more than 600 feet away as they might be to someone living only 300 feet away, he says.
So since people’s wealth is to a great degree tied to their home values, he writes, “From a policy perspective, this ﬁnding suggests that government initiatives that would reduce the number of methamphetamine labs should be well funded.”
We can actually complete the thought experiment for the White residence by looking at how much homes in the real-life neighbourhood where externals are shot
So a 10.5% decline would kick prices down to $US237,175 for homes up the block, and declines to $US253,075 for all of Loma.
Thanks a lot, Mr. White.