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Alcohol availability and crime: a robust approach


  • Kwabena Gyimah-Brempong
  • Jeffrey Racine


The relationship between alcohol availability and crime is investigated in this study. It first considers common parametric specifications that have been used in the literature. After applying a powerful consistent conditional moment test for correct specification, it is found that these common parametric specifications are rejected by the data. The study then proceeds with a robust nonparametric method that can have a rate of convergence close to that for a correctly specified parametric model when the underlying relationship is somewhat linear. The application of nonparametric methods reveals structure present in the data that would remain undetected when applying common parametric specifications, but more importantly reveals that the impact of alcohol availability is considerably higher than one might believe on the basis of the misspecified parametric model. It is also found that the marginal effect of alcohol availability on crime changes with the level of alcohol availability.

Suggested Citation

  • Kwabena Gyimah-Brempong & Jeffrey Racine, 2006. "Alcohol availability and crime: a robust approach," Applied Economics, Taylor & Francis Journals, vol. 38(11), pages 1293-1307.
  • Handle: RePEc:taf:applec:v:38:y:2006:i:11:p:1293-1307
    DOI: 10.1080/00036840500398869

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    References listed on IDEAS

    1. Saffer, Henry & Chaloupka, Frank, 1999. "The Demand for Illicit Drugs," Economic Inquiry, Western Economic Association International, vol. 37(3), pages 401-411, July.
    2. Racine, Jeff & Li, Qi, 2004. "Nonparametric estimation of regression functions with both categorical and continuous data," Journal of Econometrics, Elsevier, vol. 119(1), pages 99-130, March.
    3. Li, Qi & Racine, Jeff, 2003. "Nonparametric estimation of distributions with categorical and continuous data," Journal of Multivariate Analysis, Elsevier, vol. 86(2), pages 266-292, August.
    4. Cherry, Todd L. & List, John A., 2002. "Aggregation bias in the economic model of crime," Economics Letters, Elsevier, vol. 75(1), pages 81-86, March.
    5. Frank J. Chaloupka & Henry Wechsler, 1996. "Binge Drinking In College: The Impact Of Price, Availability, And Alcohol Control Policies," Contemporary Economic Policy, Western Economic Association International, vol. 14(4), pages 112-124, October.
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    Cited by:

    1. Deniz Baglan & Hakan Yilmazkuday, 2016. "Financial Health and the Intensive Margin of Trade," Working Papers 1607, Florida International University, Department of Economics.
    2. Kwabena Gyimah-Brempong, 2006. "Neighborhood income, alcohol availability, and crime rates," The Review of Black Political Economy, Springer;National Economic Association, vol. 33(3), pages 21-44, March.

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