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I Introduction Do increases in alcohol outlet density increase crime? The media and the general public certainly think so: One CBS 5 Investigates report documented how liquor stores that stay open late at night in downtown Californian neighborhoods tend to be a congregation place of gangs, leading to such stores becoming `hot spots' for violent crime; Another report from the Sacramento Bee quotes Sacramento Police Captain Ted Mandalla commenting that "people purchase alcohol and consume it close by, and then they become bold enough to do things they wouldn't ordinarily do, or (they) consume alcohol and become prey". Subsumed within the larger umbrella of rational choice theory, a criminological theory that fits the above description is Cohen and Felson's (1979) routine activities theory, which states that crime results from a nonrandom convergence in time and space of likely offenders (drunkards and/or drug addicts), suitable targets (other intoxicated individuals or passer-bys) and the lack of able guardians (absence of a strong police presence). Is the crime increase brought about by alcohol outlets confined to the immediate vicinity of the outlet? Or does the increased availability of alcohol also lead to an increase in alcohol abuse, thereby increasing crime in the broader neighborhood of the outlet as well? According to a Bureau of Justice Statistics 1998 report, 40% of criminal offenders report using alcohol during the time of offense, while 60% say they have been drinking regularly the year before the offense was committed. This suggests that alcohol consumption may play a role in crime, although the exact magnitude of its impact and the causal channels through which it operates, if any, remain unknown. Possibly due to an increased awareness from media reports and growing frustrations of residents who live close to liquor stores, it has become increasingly common to see reports in local newspapers of residents uniting to either close down problem liquor stores or to prevent more liquor stores from opening in their neighborhood. However, while numerous studies find a correlation between alcohol outlet density and crime, to my knowledge, no study has shown a causal relationship between alcohol outlets and crime. Hence, although there is strong evidence that alcohol outlet density is related to crime, it remains inconclusive as to whether alcohol outlets themselves cause crime, result in a displacement of crime from surrounding areas, or 2