PSM-DID estimator also controls for unobserved time-invariant and time-varying characteristics through municipal- and time fixed effects.
formation on where the firm is located.10
Poverty assistance variable encompasses the number of residents that receive government aid based on the Work and Assistance law (WWB). The value of aid given to residents is based on the income associated with the household. CBS receives data on the government assistance provided to residents from Municipality Basic Administration from Dutch municipalities containing their gender, date of birth, and ethnic origin. This is combined with the Social Statistic Database (SSB) containing data on persons, households, employment, benefits, and so forth.
University students is the number of residents within a municipality that are following university education. Data is recorded by age, education type, level, origin, and registered residence.111213 The number of students that are in higher education or have graduated with a university or vocational degree is tracked by the ”Project one number Higher Education”. The CBS and other government institutions use data from the Central Registry of Registrations in Higher Education (CRIHO) as the source.
Household income comes from the annual Regionale Inkomen Onderzoek (Regional Income Research, RIO) conducted by CBS contains data on gender, position within the household, age, socio-economic category, ethnic origin, and income.14 The RIO is based on registers from the IRS and the Gemeente Basis Administratie (Municipality Basis Administration, GBA) which encom-passes all municipality residents registered within the municipality.15
Real estate is the value of real estate classified as housing within a municipality. The Waardering Onroerende Zaken (Valuation of Immovable Property Act, WOZ) requires Dutch municipalities to report the value of real estate within the domain of the municipality to the Dutch Center Bureau of Statistics. The Dutch Center Bureau of Statistics collects and maintains the value of real estate such as housing units, non-housing, and the average house value on provincial-, and municipal level.16
Restaurant density contains the number of firms categorized as restaurants using the Standaard Bedrijfs Index (Standard Company Index, SBI). The number of firms within a certain distance is the average number of firms within a certain distance for all municipality residents. The definition of resident used by the CBS is when a person belongs to the population of a certain area and is registered within the GBA. Exact information on the location of firms within municipalities is not known to CBS and therefore collects information from Locatus which is the research firm with data on industry characteristics within the BENELUX (Belgium, Netherlands, Luxembourg) region.17 Locatus collects data on the retail shop name, shop size, type, and so forth. CBS uses Locatus to maintain the number of firms from the retail-, hospitality, and recreational industry and their location within a municipality. Combining this with the geographical data, the number of firms of a specific industry within the municipality is calculated within a range of 1, 3, 5, 10, or 20-kilometer diameter. CBS calculates the density of the number of firms by counting the number of firms within a specific diameter from each household within a municipality and averaging the total.
In addition to these variables, the data set is combined with prior work on the coffee shops published by Bieleman et al. (2017) which contains the number of coffee shops per coffee shop municipality within the Netherlands. The final data set contains 103 observations over a period of 6 years from 2009 to 2014 resulting in a total number of 618 observations.
10All firms registered within the Netherlands are mandated by Dutch law to declare employee income paid to employees to the IRS and UWV where the IRS will determine the applicable tax rate and the UWV the social premiums.
11Education type is available on secondary education, secondary vocational education, continued general adult education, and higher education.
12Origin indicates the ethnic nationality of the parents or the person in question.
13Registered residence is the place where the student is registered in a specific school year August to July in the following year. Higher education is from September to August in the following year.
14Definition of income used by the CBS is income from employment, business, income insurance payments, and welfare payments such as child benefits.
15In case of students, the RIO uses an additional source from the Department of Education (DUO) with regards to account for education loans or scholarships.
16CBS defines two main groups for real estate: houses and non-houses. Houses are categorized as either houses registered as the primary residence, houses with space for commercial activities, recreation homes and other houses.
Non-houses are categorized as either farms, non-housing real estate partially used as housing, non-housing real estate, and land.
17Locatus can be found here: https://locatus.com/en/
Table 3.1: Descriptive Statistics of Coffee Shop Municipalities in 2011
Note: ∗p <0.1,∗ ∗p <0.05,∗ ∗ ∗p <0.01.
Table 3.1 presents the descriptive statistics (mean, mean differences, standard deviation) for all, treated, and control coffee shop municipalities in the pre-treatment period of 2011. Table 3.1 reports no significant mean differences between the treated and control coffee shop municipalities prior to the implementation of the policy in 2012 in the soft drug crime or arrest rate.
Though the results presented in Table 3.1 are statistically insignificant, the number of soft drug committed are higher in treated coffee shop municipalities even though reported as not significant which also applies for the number of suspects arrested connected with soft drug crimes. Considering that crime levels associated with drugs were significantly higher in the early 2000s and have been dropping significantly since, there is still a small but insignificant discrepancy in terms of drug crimes between treated- and control coffee shop municipalities. One of the explanations for this could be attributed that the three Southern provinces of the Netherlands are border regions with Belgium and Germany making it especially popular for European drug tourists.
Table 3.2: Descriptive Statistics of Coffee Shop Municipalities in 2012
Note: ∗p <0.1,∗ ∗p <0.05,∗ ∗ ∗p <0.01.
Table 3.2 presents the descriptive statistics (mean, mean differences, and standard errors) for all-, treated, and control coffee shop municipalities in the post-treatment period of 2012.
Unlike the descriptive statistics presented in Table 3.1, the policy had an immediate impact on the number of registered soft drug crimes and the number of arrested suspects in connection with soft drug crimes. In comparison with the results presented in Table 3.1, the number of registered soft drug crimes increased by 11% and the arrest rate for soft drug crimes increased by 16% after the policy was implemented.
These findings corroborate earlier reports by Maalste and Hebbens (2012) and van Ooyen et al. (2014). Even though there was a insignificant increase in the number of hard drug crimes and arrests, the results reported by Table 3.2 provides an indication that the policy did not cause an increase after its implementation in 2012. Though there are some non-significant differences between the treated- and control coffee shop municipality characteristics, these are not reported as statistically different indicating that coffee shop municipalities do not differ substantially before and after the implementation of the policy.