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Understanding the determinants of crime

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  • Ayse Imrohoroglu
  • Antonio Merlo
  • Peter Rupert

Abstract

In this paper, we use an overlapping generations model where individuals are allowed to engage in both legitimate market activities and criminal behavior in order to assess the role of certain factors on the property crime rate. In particular, we investigate if any of the following could be capable of generating the large differences in crime rates that are observed across countries: differences in the unemployment rate, the fraction of low-human-capital individuals in an economy, the probability of apprehension, the duration of jail sentences, and income inequality. We find that small differences in the probability of apprehension and in income inequality can generate quantitatively significant differences in the crime rates across similar environments.

Suggested Citation

  • Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2006. "Understanding the determinants of crime," Working Paper 0602, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwp:0602
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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. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2004. "What Accounts For The Decline In Crime?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 707-729, August.
    3. Hansen, Gary D & Imrohoroglu, Ayse, 1992. "The Role of Unemployment Insurance in an Economy with Liquidity Constraints and Moral Hazard," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 118-142, February.
    4. Matz Dahlberg & Magnus Gustavsson, 2008. "Inequality and Crime: Separating the Effects of Permanent and Transitory Income," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(2), pages 129-153, April.
    5. Polinsky, A. Mitchell & Shavell, Steven, 1984. "The optimal use of fines and imprisonment," Journal of Public Economics, Elsevier, vol. 24(1), pages 89-99, June.
    6. Grogger, Jeffrey, 1991. "Certainty vs. Severity of Punishment," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 297-309, April.
    7. Fajnzylber, Pablo & Lederman, Daniel & Loayza, Norman, 2002. "Inequality and Violent Crime," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 1-40, April.
    8. Ann Dryden Witte & Helen Tauchen, 1994. "Work and Crime: An Exploration Using Panel Data," NBER Working Papers 4794, National Bureau of Economic Research, Inc.
    9. Levitt, Steven D, 1998. "Why Do Increased Arrest Rates Appear to Reduce Crime: Deterrence, Incapacitation, or Measurement Error?," Economic Inquiry, Western Economic Association International, vol. 36(3), pages 353-372, July.
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    11. 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.
    12. Nilsson, Anna, 2004. "Income Inequality and Crime: The Case of Sweden," Research Papers in Economics 2004:3, Stockholm University, Department of Economics.
    13. Ehrlich, Isaac, 1981. "On the Usefulness of Controlling Individuals: An Economic Analysis of Rehabilitation, Incapacitation, and Deterrence," American Economic Review, American Economic Association, vol. 71(3), pages 307-322, June.
    14. Grogger, Jeff, 1998. "Market Wages and Youth Crime," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 756-791, October.
    15. Cameron, Samuel, 1988. "The Economics of Crime Deterrence: A Survey of Theory and Evidence," Kyklos, Wiley Blackwell, vol. 41(2), pages 301-323.
    16. Witte, Ann D & Tauchen, Helen, 1994. "Work and Crime: An Exploration Using Panel Data," Public Finance = Finances publiques, , vol. 49(Supplemen), pages 155-167.
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    Cited by:

    1. Brosnan, Stephen, 2016. "The Socioeconomic Determinants of Crime in Ireland from 2003-2012," MPRA Paper 74118, University Library of Munich, Germany.
    2. 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.
    3. Konov, Joshua Ioji / JK, 2011. "Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc)," MPRA Paper 35714, University Library of Munich, Germany.
    4. Baharom, A.H. & Habibullah, M.S., 2008. "Crime and Income Inequality: The Case of Malaysia," MPRA Paper 11871, University Library of Munich, Germany.
    5. King Yoong Lim & Pengfei Jia & Ali Raza, 2018. "Crime, Human Capital, and the Impact of Different Taxation," Working Papers 220851234, Lancaster University Management School, Economics Department.
    6. Bethencourt, Carlos & Kunze, Lars, 2014. "On the intergenerational nature of criminal behavior," MPRA Paper 58344, University Library of Munich, Germany.
    7. Edward Nissan & Shahdad Naghshpour, 2013. "Connecting corruption to ethnic polarization and religious fractionalization," Journal of Economic Studies, Emerald Group Publishing, vol. 40(6), pages 763 - 774, November.

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    Keywords

    Crime;

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