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Can individuals’ aversion to drug markets curb the benefits of decriminalization? We investigate the effect of two policies on housing demand in the Netherlands: the distance-to-school criterion, which closed some cannabis shops in a few cities; and the zero-tolerance policy, which banned shops within municipal jurisdictions. While a small increase in the distance to retailers raised house prices by 1–5%, a substantial increase reduced them by 1–6%. Both policies reduced property crime, but the zero-tolerance was also related to fewer jobs. Our findings reveal that cities benefit from having cannabis shops, but households’ aversion to related nuisances depreciates surrounding areas.

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This is an author-produced, peer-reviewed version of this article. © 2022, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International license. The final, definitive version of this document can be found online at the Journal of Economic Behavior & Organization,

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