Does Paying with Cards Reduce Crime at Stores? Evidence from a Targeted Cash Ban in Uruguay

Abstract

We estimate the effect of cash usage on crime by exploiting a change in law in the Uruguayan capital that banned cash payments in gas stations at night. We use georeferenced crime data that allow for precise measurement of crime rates in radii around gas stations and radii around shops and other areas that were not included in the cash ban. The cash ban caused a decline of 25 percent or more in robberies in the treated areas. The effect is not observed for robberies near gas stations during daytime hours when the ban was not in effect or for crimes not motivated by cash, such as domestic violence. We find no evidence that robberies were displaced to other times or areas. Repeating our study aggregating to the neighborhood attenuates the causal effect, which may explain the lower estimates from less precise data in previous literature.