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The econometrics of crime

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  • Horst Entorf
  • Hannes Spengler

Abstract

According to classical economic theory of criminality, an increase in the expected punishment (i.e. the result of combining the likelihood of punishment and the amount of punishment) should lead to a reduction in crime. In an empirical analysis, a test of this plausible hypothesis is extremely complex. "Criminality" is broken down in a large number of crimes and the operationalisation of "likelihood of punishment" in a system of law involves the actions and decisions of a large number of institutions - police, prosecution, courts - and varies in the numbers of solved crimes and the rates of charges and sentencing as well as in decisions on fines, custody and probation or juvenile punishment. Usually in empirical crime research only a small portion of these factors are examined simultaneously. Prof. Horst Entorf, Technical University of Darmstadt, and Hannes Spengler, DIW, Berlin and TU Darmstadt, have constructed a comprehensive database, with crime and prosecution statistics for 1977-2001. In this article the use of the database and a econometric panel study of the effect of the German criminal prosecution system and the crime rates in the six most important crime categories are presented. The results give clear evidence for the effectiveness of deterrents and hence an empirical confirmation of the economic theory of criminality.

Suggested Citation

  • Horst Entorf & Hannes Spengler, 2005. "The econometrics of crime," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(16), pages 13-25, August.
    • Handle: RePEc:ces:ifosdt:v:58:y:2005:i:16:p:13-25
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    References listed on IDEAS

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    1. 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.
    2. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-290, June.
    3. W. Kip Viscusi, 1986. "Market Incentives for Criminal Behavior," NBER Chapters, in: The Black Youth Employment Crisis, pages 301-351, National Bureau of Economic Research, Inc.
    4. Spengler, Hannes, 2004. "Ursachen und Kosten der Kriminalität in Deutschland : drei empirische Untersuchungen," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 22827, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    5. Ann Dryden Witte, 1980. "Estimating the Economic Model of Crime With Individual Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(1), pages 57-84.
    6. Viscusi, W Kip, 1986. "The Risks and Rewards of Criminal Activity: A Comprehensive Test of Criminal Deterrence," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 317-340, July.
    7. 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.
    8. 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.
    9. 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.
    10. Richard B. Freeman & Harry J. Holzer, 1986. "The Black Youth Employment Crisis," NBER Books, National Bureau of Economic Research, Inc, number free86-1, March.
    11. Wolpin, Kenneth I, 1980. "A Time Series-Cross Section Analysis of International Variation in Crime and Punishment," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 417-423, August.
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    Cited by:

    1. Entorf, Horst, 2014. "Jenseits der Fallzahlen: Die Kriminalitätsentwicklung bei ökonomischer Bewertung der Schäden," IZA Standpunkte 73, Institute of Labor Economics (IZA).
    2. Entorf, Horst, 2014. "Anmerkungen zur Herleitung eines schadensgewichteten Index der Kriminalitätsentwicklung [On the construction of a severity-based index of crime]," MPRA Paper 56626, University Library of Munich, Germany.
    3. Horst, Entorf, 2014. "Was kostet uns die Kriminalität? … und welche Kosten sind durch Kriminalitätsbekämpfung vermeidbar? [What are the costs of crime? ... and what part of it can be avoided by fighting crime?]," MPRA Paper 56627, University Library of Munich, Germany.
    4. Entorf, Horst, 2007. "Evaluation des Maßregelvollzugs: Grundzüge einer Kosten-Nutzen-Analyse," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 35718, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).

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    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law

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