1) the negative externalities of being near crime. Suppose you live in a densely populated enough area that you can expect a person to be murdered within 1km of you every year. There's another area, with an identical crime rate but a much more sparsely populated population such that you'd expect a person to be murdered within 10km of you every year. Most people would much prefer the latter.
2) How people adjust their behavior (to avoid the externalities and risk of being an accidental victim). There are places in SF I simply won't step foot in or even drive through after 10pm or so. That's a cost being absorbed by people; if they didn't do so, there would be more additional accidental murders.
1) the negative externalities of being near crime. Suppose you live in a densely populated enough area that you can expect a person to be murdered within 1km of you every year. There's another area, with an identical crime rate but a much more sparsely populated population such that you'd expect a person to be murdered within 10km of you every year. Most people would much prefer the latter.
2) How people adjust their behavior (to avoid the externalities and risk of being an accidental victim). There are places in SF I simply won't step foot in or even drive through after 10pm or so. That's a cost being absorbed by people; if they didn't do so, there would be more additional accidental murders.