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Rainfall, Poverty and Crime in 19th Century Germany

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Author Info

  • Mehlum, Halvor

    ()
    (Dept. of Economics, University of Oslo)

  • Miguel, Edward

    ()
    (bDepartment of Economics, University of California)

  • Torvik, Ragnar

    ()
    (cDepartment of Economics, Norwegian University of Science and Technology)

Abstract

We estimate the impact of poverty on crime in 19th century Bavaria, Germany. Rainfall is used as an instrumental variable for the price of rye to address identification problems found in the existing literature. The rye price was a major determinant of the cost of living and poverty during this period. The rye price has a positive and statistically significant effect on property crime: a one standard deviation increase in the rye price increased property crime by a moderate 8 percent, a result similar to recent findings from the contemporary U.S. This result is robust to another poverty measure (the real wage), and when we restrict attention to lagged rainfall measures as instruments – ruling out some possible violations of the exclusion restriction. OLS estimates are twice as large as instrumental variable estimates. Higher rye prices lead to significantly less violent crime, though, and we argue that higher beer prices (caused by higher rye prices) are a likely explanation. We discuss implications for economic theories of crime, and for public policy in less developed countries today.

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Bibliographic Info

Paper provided by Oslo University, Department of Economics in its series Memorandum with number 04/2004.

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Length: 25 pages
Date of creation: 15 Jan 2004
Date of revision:
Handle: RePEc:hhs:osloec:2004_004

Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Email:
Web page: http://www.oekonomi.uio.no/indexe.html
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Keywords: Poverty; Crime; Rainfall; Germany;

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  1. O'Donoghue, Ted & Rabin, Matthew, 2000. "Risky Behavior Among Youths: Some Issues from Behavioral Economics," Department of Economics, Working Paper Series qt5sf0z5rs, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  2. Loewenstein, George & O'Donoghue, Ted & Rabin, Matthew, 2002. "Projection Bias in Predicting Future Utility," Working Papers 02-11, Cornell University, Center for Analytic Economics.
  3. Baten, Jorg & Murray, John E., 2000. "Heights of Men and Women in 19th-Century Bavaria: Economic, Nutritional, and Disease Influences," Explorations in Economic History, Elsevier, vol. 37(4), pages 351-369, October.
  4. Sara Markowitz, 2000. "Criminal Violence and Alcohol Beverage Control: Evidence from an International Study," NBER Working Papers 7481, National Bureau of Economic Research, Inc.
  5. Raphael, Steven & Winter-Ember, Rudolf, 2001. "Identifying the Effect of Unemployment on Crime," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 259-83, April.
  6. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  7. Sara Markowitz, 2000. "An Economic Analysis of Alcohol, Drugs, and Violent Crime in the National Crime Victimization Survey," NBER Working Papers 7982, National Bureau of Economic Research, Inc.
  8. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "What causes violent crime?," European Economic Review, Elsevier, vol. 46(7), pages 1323-1357, July.
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