The Breakdown

Explaining Southern California's economy

Sorry, small business — liquor stores can increase crime

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28864 full

KPCC's Ruxandra Guidi did a story on Tuesday about Boyle Heights and its liquor store problem. To summarize, a group of activists believes that the concentration of liquor stores in the neighborhood is far too high, that this leads to crime, and that the issuance of new liquor licenses should be limited.

Initially I thought this was a good example of the vice league standing in the way of market forces — and small business, to boot! There may be a lot of liquor stores in Boyle Heights, a neighborhood east of Downtown L.A., but they pay taxes and probably employ one or several people in addition to the owner. True, they may be preying on the area. But then again, if you want to open a liquor store or establishment that serves alcohol, you want to go where the customers are.

However, this is one of those cases where the public good trumps the free market. Some undated research done by Kathryn Stewart of the Pacific Institute for Research and Evaluation demonstrates that there's a link between alcohol outlet density and violence:

A study of changes in outlet density over time as related to violence in California found that regardless of other neighborhood characteristics, an increase in outlets increased violence. In neighborhoods with a high minority population and low incomes, the effect was more than four times greater than for the statewide sample of communities.

That last sentence characterizes Boyle Heights, although it may not be uniformly accurate; the poverty rate there is significantly, but not ridiculously, higher than the rest of the city (33 versus 22 percent). So regardless of how good business — small business — may be in the liquor-store game, the groups that are protesting the establishments have some solid analysis on their side.

Follow Matthew DeBord and the DeBord Report on Twitter.

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