Kelaher, Richard and Sarafidis, Vasilis (2011): Crime and Punishment Revisited.
Download (247kB) | Preview
Despite an abundance of empirical evidence on crime spanning over forty years, there exists no consensus on the impact of the criminal justice system on crime activity. We argue that this may be due to the combined effect of simultaneity, omitted variable bias and aggregation bias that may confound many of these studies. We construct a new panel data set of local government areas in Australia and develop a testing framework for the implications of economic theory on crime behaviour. The empirical results suggest that the criminal justice system can potentially exert a much greater influence on crime activity than is the common view in the literature. In addition, we find that increasing the risk of apprehension and conviction is more influential in reducing crime than raising the expected severity of punishment. Violent crime is more persistent and relatively less responsive to law enforcement policies compared to non-violent crime.
|Item Type:||MPRA Paper|
|Original Title:||Crime and Punishment Revisited|
|Keywords:||Crime, deterrence, simultaneity, omitted variable bias, aggregation bias, panel data, GMM.|
|Subjects:||C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
|Depositing User:||Vasilis Sarafidis|
|Date Deposited:||19. Jan 2011 17:05|
|Last Modified:||12. Feb 2013 10:14|
Ahn, S. and Schmidt, P. (1995). Efficient estimation of models for dynamic panel data. Journal of Econometrics, 68(1):5-27.
Arellano, M. and Bond, S. (1991). Some tests of specification for panel data: Monte carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2):277-297.
Arellano, M. and Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1):29-51.
Banks, G. (2010). Report on government services 2010. Technical report, Steering Committee for the Review of Government Service Provision, Productivity Commission, Canberra.
Becker, G. S. (1968). Crime and punishment: An economic approach. Journal of Political Economy, 76(2):169-217.
Blumstein, A., Cohen, J., and Nagin, D. S., editors (1978). Deterrence and Incapacitation - Estimating the Effect of Criminal Sanctions on Crime Rates. National Academies Press, Washington, DC.
Blundell, R. and Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1):115-143.
Bodman, P. M. and Maultby, C. (1997). Crime, punishment and deterrence in australia: A further empirical investigation. International Journal of Social Economics, 24:884-901.
Car-Hill, R. and Stern, N. (1973). An econometric model of the supply and control of recorded offences in england and wales. Journal of Public Economics, 2(4):289-318.
Corman, H. and Mocan, H. N. (2000). A time-series analysis of crime, deterrence, and drug abuse in new york city. The American Economic Review, 90(3):584-604.
Cornwell, C. and Trumbull, W. N. (1994). Estimating the economic model of crime with panel data. The Review of Economics and Statistics, 76(2):360-366.
Dills, A. K., Miron, J. A., and Summers, G. (2008). What do economists know about crime? National Bureau of Economic Research Working Paper Series, No. 13759.
Durlauf, S. N. and Nagin, D. S. (2010). The deterrent effect of imprisonment. In Controlling Crime: Strategies and Tradeoffs, NBER Chapters. National Bureau of Economic Research, Inc.
Ehrlich, I. (1973). Participation in illegitimate activities: A theoretical and empirical investigation. Journal of Political Economy, 81(3):521-65.
Ehrlich, I. (1975). The deterrent effect of capital punishment: A question of life and death. American Economic Review, 65(3):397-417.
Fajnzylber, P., Lederman, D., and Loayza, N. (2002). What causes violent crime? European Economic Review, 46(7):1323-1357.
Haas, E. (1980). The supply and demand for municipal crime prevention. American Economist, 24(1).
Hansen, L. P. (1982). Large sample properties of generalized methods of moments estimators. Econometrica, 50(4):1029-1054.
Hirsch, W. Z. (1988). Law and Economics. Academic Press, San Diego, 2nd edition.
Johnson, R. and Raphael, S. (2006). How much crime reduction does the marginal prisoner buy? Mimeo.
Klick, J. and Tabarrok, A. (2005). Using terror alert levels to estimate the effect of police on crime. Journal of Law and Economics, 48(1):267-79.
Levitt, S. D. (1996). The effect of prison population size on crime rates: Evidence from prison overcrowding litigation. The Quarterly Journal of Economics, 111(2):319-351.
Levitt, S. D. (1997). Using electoral cycles in police hiring to estimate the effect of police on crime. The American Economic Review, 87(3):270-290.
Levitt, S. D. (2001). Alternative strategies for identifying the link between unemployment and crime. Journal of Quantitative Criminology, 17(4):377-390.
Levitt, S. D. (2002). Using electoral cycles in police hiring to estimate the effect of police on crime: Reply. The American Economic Review, 92(4):1244-1250.
Liedka, R. V., Piehl, A. M., and Useem, B. (2006). The crime-control effect of incarceration: Does scale matter? Criminology and Public Policy, 5(2):245-276.
Marvell, T. and Moody, C. (1994). Prison population growth and crime reduction. Journal of Quantitative Criminology, 10(2):109-140.
Marvell, T. B. and Moody, C. E. (1996). Specification problems, police levels, and crime rates. Criminology, 34(4):609-646.
Merton, R. K. (1938). Social structure and anomie. American Sociological Review, 3(5):672-682.
Mustard, D. B. (2003). Reexamining criminal behavior: The importance of omitted variable bias. The Review of Economics and Statistics, 85(1):205-211.
Nagin, D. S. (1978). General deterrence: A review of the empirical evidence. In Blumstein, A., Cohen, J., and Nagin, D. S., editors, On the Feasibility of Identifying the Crime Function in a Simultaneous Model of Crime Rates and Sanction Levels. National Academies Press, Washington, DC.
Pyle, D. (1984). Combating crime: Do the police give value for money? Public Money, 4(1):27-30.
Raphael, S. and Stoll, M. A. (2009). Why are so many americans in prison? In Raphael, S Stoll, M. A., editor, Do Prisons Make Us Safer? The Benefits and Costs of the Prison Boom. Russell Sage Foundation, New York.
Roodman, D. (2009). How to do xtabond2: An introduction to difference and system gmm in stata. Stata Journal, 9(1):86-136.
Sampson, R. J. and Cohen, J. (1988). Deterrent effects of the police on crime: A replication and theoretical extension. Law and Society Review, 22(1):163-189.
Sjoquist, D. L. (1973). Property crime and economic behavior: Some empirical results. The American Economic Review, 63(3):439-446.
Trumbull, W. N. (1989). Estimations of the economic model of crime using aggregate and individual level data. Southern Economic Journal, 56(2):423-439.
Walmsley, R. (2009). World prison population list. T echnical report, King's College London.
Windmeijer, F. (2005). A finite sample correction for the variance of linear efficient two-step gmm estimators. Journal of Econometrics, 126(1):25-51.
Withers, G. (1984). Crime, punishment and deterrence in australia: An empirical investigation. Economic Record, 60(2):176-185.
Witt, R. and Witte, A. (2000). Crime, prison, and female labor supply. Journal of Quantitative Criminology, 16(1):69-85.
Zimring, F. E. and Hawkins, G. J. (1973). Deterrence - The Legal Threat In Crime Control. University of Chicago Press, Chicago.