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Understanding the determinants of crime

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  • Ayse Imrohoroglu
  • Antonio Merlo
  • Peter Rupert

Abstract

In this paper, we use an overlapping generations model where individuals are allowed to engage in both legitimate market activities and criminal behavior in order to assess the role of certain factors on the property crime rate. In particular, we investigate if any of the following could be capable of generating the large differences in crime rates that are observed across countries: differences in the unemployment rate, the fraction of low-human-capital individuals in an economy, the probability of apprehension, the duration of jail sentences, and income inequality. We find that small differences in the probability of apprehension and in income inequality can generate quantitatively significant differences in the crime rates across similar environments.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 0602.

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Date of creation: 2006
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Handle: RePEc:fip:fedcwp:0602

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Keywords: Crime;

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References

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  1. Grogger, Jeffrey, 1991. "Certainty vs. Severity of Punishment," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 297-309, April.
  2. Steven D. Levitt, 1995. "Why Do Increased Arrest Rates Appear to Reduce Crime: Deterrence, Incapacitation, or Measurement Error?," NBER Working Papers 5268, National Bureau of Economic Research, Inc.
  3. Cameron, Samuel, 1988. "The Economics of Crime Deterrence: A Survey of Theory and Evidence," Kyklos, Wiley Blackwell, vol. 41(2), pages 301-23.
  4. Hansen, G.D. & Imrohoroglu, A., 1990. "The Role Of Unemployment Insurance In An Economy With Liquidity Constraints And Moral Hazard," Papers 21, California Los Angeles - Applied Econometrics.
  5. Jeff Grogger, 1997. "Market Wages and Youth Crime," NBER Working Papers 5983, National Bureau of Economic Research, Inc.
  6. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  7. A. Mitchell Polinsky & Steven Shavell, 1982. "The Optimal Use of Fines and Imprisonment," NBER Working Papers 0932, National Bureau of Economic Research, Inc.
  8. Matz Dahlberg & Magnus Gustavsson, 2008. "Inequality and Crime: Separating the Effects of Permanent and Transitory Income," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(2), pages 129-153, 04.
  9. Nilsson, Anna, 2004. "Income inequality and crime: The case of Sweden," Working Paper Series 2004:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  10. Ehrlich, Isaac, 1981. "On the Usefulness of Controlling Individuals: An Economic Analysis of Rehabilitation, Incapacitation, and Deterrence," American Economic Review, American Economic Association, vol. 71(3), pages 307-22, June.
  11. Witte, Ann D & Tauchen, Helen, 1994. "Work and Crime: An Exploration Using Panel Data," Public Finance = Finances publiques, , vol. 49(Supplemen), pages 155-67.
  12. Isaac Ehrlich, 1996. "Crime, Punishment, and the Market for Offenses," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 43-67, Winter.
  13. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-65, May-June.
  14. Nilsson, Anna, 2004. "Income Inequality and Crime: The Case of Sweden," Research Papers in Economics 2004:3, Stockholm University, Department of Economics.
  15. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
  16. Ann Dryden Witte & Helen Tauchen, 1994. "Work and Crime: An Exploration Using Panel Data," NBER Working Papers 4794, National Bureau of Economic Research, Inc.
  17. Richard B. Freeman, 1996. "Why Do So Many Young American Men Commit Crimes and What Might We Do About It?," NBER Working Papers 5451, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Baharom, A.H. & Habibullah, M.S., 2008. "Crime and Income Inequality: The Case of Malaysia," MPRA Paper 11871, University Library of Munich, Germany.
  2. 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.
  3. Konov, Joshua Ioji / JK, 2011. "Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc)," MPRA Paper 35714, University Library of Munich, Germany.

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