IDEAS home Printed from https://ideas.repec.org/p/adl/wpaper/2019-02.html
   My bibliography  Save this paper

The importance of Punishment Substitutability in Criminometric Studies

Author

Listed:
  • Eugene Braslavskiy

    (School of Economics, University of Adelaide)

  • Firmin Doko Tchatoka

    (School of Economics, University of Adelaide)

  • Virginie Masson

    (School of Economics, University of Adelaide)

Abstract

This study investigates the role of punishment substitutability in the empirical estimation of the economic model of crime. Using a dynamic panel data model fitted to a panel of Local Government Areas in New South Wales, Australia, we evaluate the effects of financial penalties and imprisonment on the crime rate. Our results show that crime is clearly a dynamic phenomenon, and that failure to incorporate both financial penalties and imprisonment can lead to a misspecfied model. Furthermore, our results vary signifcantly for different crime categories, highlighting the importance of analysing specific crime categories separately.

Suggested Citation

  • Eugene Braslavskiy & Firmin Doko Tchatoka & Virginie Masson, 2019. "The importance of Punishment Substitutability in Criminometric Studies," School of Economics and Public Policy Working Papers 2019-02, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2019-02
    as

    Download full text from publisher

    File URL: https://media.adelaide.edu.au/economics/papers/doc/wp2019-02.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
    2. Lawrence Katz & Steven D. Levitt & Ellen Shustorovich, 2003. "Prison Conditions, Capital Punishment, and Deterrence," American Law and Economics Review, Oxford University Press, vol. 5(2), pages 318-343, August.
    3. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    4. Durlauf, Steven N. & Navarro, Salvador & Rivers, David A., 2010. "Understanding aggregate crime regressions," Journal of Econometrics, Elsevier, vol. 158(2), pages 306-317, October.
    5. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    6. Entorf, Horst & Spengler, Hannes, 2000. "Socioeconomic and demographic factors of crime in Germany: Evidence from panel data of the German states," International Review of Law and Economics, Elsevier, vol. 20(1), pages 75-106, March.
    7. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    8. Thaler, Richard, 1977. "An econometric analysis of property crime : Interaction between police and criminals," Journal of Public Economics, Elsevier, vol. 8(1), pages 37-51, August.
    9. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    10. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    11. Todd Cherry, 2001. "Financial penalties as an alternative criminal sanction: Evidence from panel data," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 29(4), pages 450-458, December.
    12. Ehrlich, Isaac, 1975. "The Deterrent Effect of Capital Punishment: A Question of Life and Death," American Economic Review, American Economic Association, vol. 65(3), pages 397-417, June.
    13. Lance Lochner & Enrico Moretti, 2004. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports," American Economic Review, American Economic Association, vol. 94(1), pages 155-189, March.
    14. John J. Donohue & Justin Wolfers, 2009. "Estimating the Impact of the Death Penalty on Murder," American Law and Economics Review, Oxford University Press, vol. 11(2), pages 249-309.
    15. Cornwell, Christopher & Trumbull, William N, 1994. "Estimating the Economic Model of Crime with Panel Data," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 360-366, May.
    16. Kelaher, Richard & Sarafidis, Vasilis, 2011. "Crime and Punishment Revisited," MPRA Paper 28213, University Library of Munich, Germany.
    17. Arellano, Manuel, 1989. "A note on the Anderson-Hsiao estimator for panel data," Economics Letters, Elsevier, vol. 31(4), pages 337-341, December.
    18. David B. Mustard, 2003. "Reexamining Criminal Behavior: The Importance of Omitted Variable Bias," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 205-211, February.
    19. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    20. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    21. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-565, May-June.
    22. Sjoquist, David Lawrence, 1973. "Property Crime and Economic Behavior: Some Empirical Results," American Economic Review, American Economic Association, vol. 63(3), pages 439-446, June.
    23. Withers, Glenn, 1984. "Crime, Punishment and Deterrence in Australia: An Empirical Investigation," The Economic Record, The Economic Society of Australia, vol. 60(169), pages 176-185, June.
    24. Glenn Withers, 1984. "Crime, Punishment and Deterrence in Australia: An Empirical Investigation," The Economic Record, The Economic Society of Australia, vol. 60(2), pages 176-185, June.
    25. Cherry, Todd L. & List, John A., 2002. "Aggregation bias in the economic model of crime," Economics Letters, Elsevier, vol. 75(1), pages 81-86, March.
    26. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    27. Buonanno, Paolo & Montolio, Daniel, 2008. "Identifying the socio-economic and demographic determinants of crime across Spanish provinces," International Review of Law and Economics, Elsevier, vol. 28(2), pages 89-97, June.
    28. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "What causes violent crime?," European Economic Review, Elsevier, vol. 46(7), pages 1323-1357, July.
    29. Wolpin, Kenneth I, 1978. "An Economic Analysis of Crime and Punishment in England and Wales, 1894-1967," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 815-840, October.
    30. Carlisle E. Moody & Thomas B. Marvell, 2010. "On the Choice of Control Variables in the Crime Equation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(5), pages 696-715, October.
    31. Hashem Dezhbakhsh & Paul H. Rubin & Joanna M. Shepherd, 2003. "Does Capital Punishment Have a Deterrent Effect? New Evidence from Postmoratorium Panel Data," American Law and Economics Review, Oxford University Press, vol. 5(2), pages 344-376, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maurice J. G. Bun & Richard Kelaher & Vasilis Sarafidis & Don Weatherburn, 2020. "Crime, deterrence and punishment revisited," Empirical Economics, Springer, vol. 59(5), pages 2303-2333, November.
    2. Kelaher, Richard & Sarafidis, Vasilis, 2011. "Crime and Punishment Revisited," MPRA Paper 28213, University Library of Munich, Germany.
    3. Eide, Erling & Rubin, Paul H. & Shepherd, Joanna M., 2006. "Economics of Crime," Foundations and Trends(R) in Microeconomics, now publishers, vol. 2(3), pages 205-279, December.
    4. Cerro, Ana María & Rodríguez Andrés, Antonio, 2011. "Typologies of Crime in the Argentine Provinces. A Panel Study 2000-2008," MPRA Paper 44460, University Library of Munich, Germany.
    5. Entorf, Horst & Spengler, Hannes, 2008. "Is Being 'Soft on Crime' the Solution to Rising Crime Rates? Evidence from Germany," IZA Discussion Papers 3710, Institute of Labor Economics (IZA).
    6. Maurice J.G. Bun, 2014. "Identifying the impact of deterrence on crime - internal versus external instruments," UvA-Econometrics Working Papers 14-03, Universiteit van Amsterdam, Dept. of Econometrics.
    7. Daniel Montolio & Simón Planells, 2013. "Does tourism boost criminal activity? Evidence from a top touristic country," Working Papers 2013/4, Institut d'Economia de Barcelona (IEB).
    8. Mojtaba Ghasemi, 2017. "Crime and punishment: evidence from dynamic panel data model for North Carolina (2003–2012)," Empirical Economics, Springer, vol. 52(2), pages 723-730, March.
    9. Daniel Montolio & Simón Planells, 2013. "Does tourism boost criminal activity? Evidence from a top touristic country," Working Papers 2013/4, Institut d'Economia de Barcelona (IEB).
    10. Philip A. Curry & Anindya Sen & George Orlov, 2016. "Crime, apprehension and clearance rates: Panel data evidence from Canadian provinces," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(2), pages 481-514, May.
    11. Guido Travaglini, 2003. "Property Crime and Law Enforcement in Italy. A Regional Panel Analysis 1980-95," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 62(2), pages 211-240, October.
    12. Neanidis, Kyriakos C. & Papadopoulou, Vea, 2013. "Crime, fertility, and economic growth: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 101-121.
    13. Buonanno, Paolo & Montolio, Daniel, 2008. "Identifying the socio-economic and demographic determinants of crime across Spanish provinces," International Review of Law and Economics, Elsevier, vol. 28(2), pages 89-97, June.
    14. Entorf, Horst, 2012. "Certainty and Severity of Sanctions in Classical and Behavioral Models of Deterrence: A Survey," IZA Discussion Papers 6516, Institute of Labor Economics (IZA).
    15. Dutta, Nabamita & Jana, Dipparna & Kar, Saibal, 2020. "Does state-level per capita income affect juvenile delinquency? An empirical analysis for Indian states," Economic Modelling, Elsevier, vol. 87(C), pages 109-120.
    16. Povilas Lastauskas & Eirini Tatsi, 2013. "Spatial Nexus in Crime and unemployment in Times of crisis: Evidence from Germany," Cambridge Working Papers in Economics 1359, Faculty of Economics, University of Cambridge.
    17. Schneider, Andreas, 2019. "Deterrence Theory in Paraguay: Exploring Fraud and Violation of Trust Cases," MPRA Paper 102204, University Library of Munich, Germany.
    18. Mohamad Kassem & Amjad Ali & Marc Audi, 2019. "Unemployment Rate, Population Density and Crime Rate in Punjab (Pakistan): An Empirical Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(2), pages 92-104, June.
    19. Cerro, Ana María & Ortega, Ana Carolina, 2012. "Sources of Regional Crime Persistence Argentina 1980-2008," MPRA Paper 44482, University Library of Munich, Germany.
    20. Zimmerman, Paul R., 2010. "Deterrence from self-protection measures in the ‘market model’ of crime: dynamic panel data estimates from employment in private security occupations," MPRA Paper 26187, University Library of Munich, Germany.

    More about this item

    Keywords

    crime; deterrence; punishment; panel data; aggregation bias;
    All these keywords.

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adl:wpaper:2019-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Qazi Haque (email available below). General contact details of provider: https://edirc.repec.org/data/decadau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.