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Economics and crime in the states

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  • Zsolt Becsi

Abstract

Polls identify crime as the number one public worry. Crime also exacts tremendous costs not factored into official measures of well-being, and it is a favorite subject of political campaign promises. However, the public seems largely unaware that crime responds to economic conditions and incentives and that the results of a substantial body of work by economists have important implications for public policy. ; This article introduces the economics and crime literature by describing a simple supply-and-demand crime model in which criminals supply crime, the public demands protection from crime, and the government provides public protection. The author uses the model to show how crime responds to a variety of demographic and economic factors and also what results to expect from public policy proposals. ; Using state data from 1971 to 1994, the article outlines broad regional differences and trends in the patterns of crime in the United States. While the nation in the 1990s has seen crime fall dramatically in almost all categories, not all regions have benefited equally. In particular, southeastern states have seen distinct worsening in crime rates relative to other regions. ; The author subjects the data to a more in-depth treatment using a panel regression approach that estimates the effects of demographic and economic variables on crime. The results mirror some found by others but also highlight serious issues vexing the empirical literature. Generally, the demographic and economic variables explain crime rather well, and estimates for the most part conform to the economic model of crime.

Suggested Citation

  • Zsolt Becsi, 1999. "Economics and crime in the states," Economic Review, Federal Reserve Bank of Atlanta, issue Q1, pages 38-56.
  • Handle: RePEc:fip:fedaer:y:1999:i:q1:p:38-56:n:v.84no.1
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    References listed on IDEAS

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    1. Richard B. Freeman, 1996. "Why Do So Many Young American Men Commit Crimes and What Might We Do about It?," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 25-42, Winter.
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    Cited by:

    1. Matthew J. Baker & Niklas J. Westelius, 2013. "Crime, expectations, and the deterrence hypothesis," Chapters,in: Research Handbook on Economic Models of Law, chapter 12, pages 235-280 Edward Elgar Publishing.
    2. Michael LaCour-Little & Stephen Malpezzi, 2001. "Gated Communities and Property Values," Wisconsin-Madison CULER working papers 01-12, University of Wisconsin Center for Urban Land Economic Research.
    3. Mauro Costantini & Iris Meco & Antonio Paradiso, 2016. "Common trends in the US state-level crime.What do panel data say?," Working Papers 2016:14, Department of Economics, University of Venice "Ca' Foscari".
    4. Steve Cook & Duncan Watson, 2013. "Breaks and Convergence in U.S. Regional Crime Rates: Analysis of Their Presence and Implications," Social Sciences, MDPI, Open Access Journal, vol. 2(3), pages 1-11, August.
    5. Eoin O’Sullivan & Ian O’Donnell, 2003. "Imprisonment and the Crime Rate in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 34(1), pages 33-64.
    6. Steven N. Durlauf & Daniel S. Nagin, 2010. "The Deterrent Effect of Imprisonment," NBER Chapters,in: Controlling Crime: Strategies and Tradeoffs, pages 43-94 National Bureau of Economic Research, Inc.
    7. Thomas B. Marvell, 2010. "Prison Population and Crime," Chapters,in: Handbook on the Economics of Crime, chapter 7 Edward Elgar Publishing.
    8. Alessandro Barbarino & Giovanni Mastrobuoni, 2014. "The Incapacitation Effect of Incarceration: Evidence from Several Italian Collective Pardons," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 1-37, February.
    9. Cömertler, Necmiye & Kar, Muhsin, 2007. "Türkiye’de Suç Oranının Sosyo-Ekonomik Belirleyicileri: Yatay Kesit Analizi
      [Economic And Social Determinants Of The Crime Rate In Turkey:Cross-Section Analysis]
      ," MPRA Paper 7288, University Library of Munich, Germany.

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