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Crime, deterrence and punishment revisited

Author

Listed:
  • Maurice J. G. Bun

    (University of Amsterdam and De Nederlandsche Bank)

  • Richard Kelaher

    (The University of Sydney Business School)

  • Vasilis Sarafidis

    (Monash University)

  • Don Weatherburn

    (NSW Bureau of Crime Statistics and Research)

Abstract

Despite an abundance of empirical evidence on crime spanning over 40 years, there exists no consensus on the impact of the criminal justice system on crime activity. We construct a new panel data set that contains all relevant variables prescribed by economic theory. Our identification strategy allows for a feedback relationship between crime and deterrence variables, and it controls for omitted variables and measurement error. We deviate from the majority of the literature in that we specify a dynamic model, which captures the essential feature of habit formation and persistence in aggregate behaviour. Our results show that the criminal justice system exerts a large influence on crime activity. Increasing the risk of apprehension and conviction is more influential in reducing crime than raising the expected severity of punishment.

Suggested Citation

  • Maurice J. G. Bun & Richard Kelaher & Vasilis Sarafidis & Don Weatherburn, 2020. "Crime, deterrence and punishment revisited," Empirical Economics, Springer, vol. 59(5), pages 2303-2333, November.
  • Handle: RePEc:spr:empeco:v:59:y:2020:i:5:d:10.1007_s00181-019-01758-6
    DOI: 10.1007/s00181-019-01758-6
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    More about this item

    Keywords

    Crime; Deterrence; Feedback; Omitted variable bias; Measurement error; 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
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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