IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The Effect of Stolen Goods Markets on Crime: Evidence from a Quasi - Natural Experiment

Listed author(s):
  • D'Este, Rocco

    (Department of Economics, University of Warwick)

Registered author(s):

    This paper analyses the causal effect of the availability of stolen goods markets on theft crimes. Motivated by the richness of anecdotal evidence, we study this overlooked determinant of crime’s production function through the lens of pawnshops, a widespread business that offers secured loans to people, with items of personal property used as collateral. The endogeneity of pawnshops to crime is addressed in multiple ways. First, we strengthen the hypothesis that pawnshops deal with stolen goods by exploiting the properties of a panel of 2176 US counties from 1997 to 2010. Then, we detect causality exploiting the exogenous rise in the price of gold in a quasi - natural experiment fashion. Specifically, the identification strategy relies on the exogeneity of the interaction between the price of gold, constantly demanded by pawnbrokers in the form of jewels that are melted down to be transformed in a bar of precious metal, and the initial concentration of pawnshops to the county. Conservative estimates show that a one standard deviation increase in gold price generates a 0.05 standard deviation increase in the effect of pawnshops on burglaries and robberies. The mechanism behind the causal effect is corroborated by numerous falsification tests on other crimes that disprove the possibility that pawnshops might cause crime through channels other than the demand for stolen goods.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2014/twerp_1040b_deste.pdf
    Download Restriction: no

    Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 1040.

    as
    in new window

    Length:
    Date of creation: 2014
    Handle: RePEc:wrk:warwec:1040
    Contact details of provider: Postal:
    CV4 7AL COVENTRY

    Phone: +44 (0) 2476 523202
    Fax: +44 (0) 2476 523032
    Web page: http://www2.warwick.ac.uk/fac/soc/economics/

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
    2. Milo Bianchi & Paolo Buonanno & Paolo Pinotti, 2008. "Do immigrants cause crime?," PSE Working Papers halshs-00586864, HAL.
    3. Steven D. Levitt, 1995. "The Effect of Prison Population Size on Crime Rates: Evidence From Prison Overcrowding Litigation," NBER Working Papers 5119, National Bureau of Economic Research, Inc.
    4. Gordon Dahl & Stefano DellaVigna, 2008. "Does Movie Violence Increase Violent Crime?," NBER Working Papers 13718, National Bureau of Economic Research, Inc.
    5. Edward L. Glaeser & Bruce Sacerdote, 1999. "Why Is There More Crime in Cities?," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 225-258, December.
    6. Jan Eeckhout & Nicola Persico & Petra E. Todd, 2010. "A Theory of Optimal Random Crackdowns," American Economic Review, American Economic Association, vol. 100(3), pages 1104-1135, June.
    7. Raphael, Steven & WINTER-EBMER, RUDOLF, 1998. "Identifying the Effect of Unemployment on Crime," University of California at San Diego, Economics Working Paper Series qt5hb4h56g, Department of Economics, UC San Diego.
    8. John Donohue & Steven Levitt, 2000. "The Impact of Legalized Abortion on Crime," NBER Working Papers 8004, National Bureau of Economic Research, Inc.
    9. Joshua Shackman & Glen Tenney, 2006. "The Effects of Government Regulations on the Supply of Pawn Loans: Evidence from 51 Jurisdictions in the U.S," Journal of Financial Services Research, Springer;Western Finance Association, vol. 30(2), pages 229-229, October.
    10. repec:pri:indrel:dsp01kw52j807k is not listed on IDEAS
    11. Steven D. Levitt, 1997. "Juvenile Crime and Punishment," NBER Working Papers 6191, National Bureau of Economic Research, Inc.
    12. repec:dau:papers:123456789/5382 is not listed on IDEAS
    13. Eric Helland & Alexander Tabarrok, 2007. "Does Three Strikes Deter?: A Nonparametric Estimation," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    14. Draca, Mirko & Machin, Stephen & Witt, Robert, 2008. "Panic on the Streets of London: Police, Crime and the July 2005 Terror Attacks," IZA Discussion Papers 3410, Institute for the Study of Labor (IZA).
    15. Jeffrey R. Kling & Jens Ludwig & Lawrence F. Katz, 2005. "Neighborhood Effects on Crime for Female and Male Youth: Evidence from a Randomized Housing Voucher Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 87-130.
    16. Bhuller, Manudeep & Havnes, Tarjei & Leuven, Edwin & Mogstad, Magne, 2011. "Broadband Internet: An Information Superhighway to Sex Crime?," IZA Discussion Papers 5675, Institute for the Study of Labor (IZA).
    17. Francesco Drago & Roberto Galbiati & Pietro Vertova, 2009. "The Deterrent Effects of Prison: Evidence from a Natural Experiment," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 257-280, 04.
    18. Jonathan Klick & Alexander Tabarrok, "undated". "Using Terror Alert Levels to Estimate the Effect of Police on Crime," American Law & Economics Association Annual Meetings 1042, American Law & Economics Association.
    19. Steven D. Levitt, 1995. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Policeon Crime," NBER Working Papers 4991, National Bureau of Economic Research, Inc.
    20. Jeffrey Grogger, 1995. "The Effect of Arrests on the Employment and Earnings of Young Men," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 51-71.
    21. Dan Silverman, 2004. "Street Crime And Street Culture," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 761-786, 08.
    22. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169-169.
    23. Jeff Grogger, 1997. "Market Wages and Youth Crime," NBER Working Papers 5983, National Bureau of Economic Research, Inc.
    24. Bruce Western & Jeffrey R. Kling & David F. Weiman, 2001. "The Labor Market Consequences of Incarceration," Working Papers 829, Princeton University, Department of Economics, Industrial Relations Section..
    25. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    26. Joshua Shackman & Glen Tenney, 2006. "The Effects of Government Regulations on the Supply of Pawn Loans: Evidence from 51 Jurisdictions in the U.S," Journal of Financial Services Research, Springer;Western Finance Association, vol. 30(1), pages 69-91, August.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:wrk:warwec:1040. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Margaret Nash)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.