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Crime and Punishment Revisited

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  • Kelaher, Richard
  • Sarafidis, Vasilis

Abstract

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.

Suggested Citation

  • Kelaher, Richard & Sarafidis, Vasilis, 2011. "Crime and Punishment Revisited," MPRA Paper 28213, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28213
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    References listed on IDEAS

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    Cited by:

    1. Eugene Braslavskiy & Firmin Doko Tchatoka & Virginie Masson, 2019. "The Importance Of Punishment Substitutability In Criminometric Studies," Bulletin of Economic Research, Wiley Blackwell, vol. 71(3), pages 491-507, July.
    2. Branimir Jovanovic, 2013. "Aggregation Bias in Trade Elasticities: The Case of Macedonia," FIW Working Paper series 106, FIW.
    3. 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.
    4. Cerro, Ana María & Ortega, Ana Carolina, 2012. "Sources of Regional Crime Persistence Argentina 1980-2008," MPRA Paper 44482, University Library of Munich, Germany.
    5. Lau, Evan & Hamzah, Siti Nur Zahara, 2012. "Crimonometric Analysis: Testing the Deterrence Hypothesis in Sabah," MPRA Paper 39297, University Library of Munich, Germany.
    6. Rosalia Condorelli, 2013. "Applied nonlinear dynamical system in social science. A nonlinear model for social control system: an application to Italian coercion system," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 1173-1198, February.
    7. 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.

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    More about this item

    Keywords

    Crime; deterrence; simultaneity; omitted variable bias; aggregation bias; panel data; GMM.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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