IDEAS home Printed from https://ideas.repec.org/p/zbw/darddp/dar_224.html
   My bibliography  Save this paper

The Economics of Crime: Investigating the Drugs-Crime Channel

Author

Listed:
  • Entorf, Horst
  • Winker, Peter

Abstract

The rising trends both in drug addiction and crime rates are of major public concern in Germany. Surprisingly, the economic theory of crime seems to ignore the drugs-crime nexus, whereas the criminological literature considers illicit drug use a main reason of criminal activities. This paper provides an econometric assessment of the drugs-crime channel within a Becker-Ehrlich model of crime supply. We analyse three different channels from drug abuse to crime: system-related, economic-related and pharmacological effects. Estimation with panel data from the German states allows us to take into account further factors that might influence both drug abuse and crime. The results indicate that drug offences have a significant impact, in particular on property crimes. We attribute this to a strong economic-related channel of drug abuse on crime.

Suggested Citation

  • Entorf, Horst & Winker, Peter, 2002. "The Economics of Crime: Investigating the Drugs-Crime Channel," Darmstadt Discussion Papers in Economics 118, Darmstadt University of Technology, Department of Law and Economics.
    • Handle: RePEc:zbw:darddp:dar_224
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/84858/1/ddpie_118.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Raphael, Steven & Winter-Ember, Rudolf, 2001. "Identifying the Effect of Unemployment on Crime," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 259-283, April.
    2. Eide, Erling & Rubin, Paul H. & Shepherd, Joanna M., 2006. "Economics of Crime," Foundations and Trends(R) in Microeconomics, now publishers, vol. 2(3), pages 205-279, December.
    3. 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.
    4. A. Bhargava & L. Franzini & W. Narendranathan, 2006. "Serial Correlation and the Fixed Effects Model," World Scientific Book Chapters, in: Econometrics, Statistics And Computational Approaches In Food And Health Sciences, chapter 4, pages 61-77, World Scientific Publishing Co. Pte. Ltd..
    5. H. Naci Mocan & Hope Corman, 2000. "A Time-Series Analysis of Crime, Deterrence, and Drug Abuse in New York City," American Economic Review, American Economic Association, vol. 90(3), pages 584-604, June.
    6. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    7. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    8. Entorf, Horst, 1997. "Random walks with drifts: Nonsense regression and spurious fixed-effect estimation," Journal of Econometrics, Elsevier, vol. 80(2), pages 287-296, October.
    9. Steven D. Levitt, 1996. "The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 319-351.
    10. Anderson, David A, 1999. "The Aggregate Burden of Crime," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 611-642, October.
    11. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-290, June.
    12. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    13. 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.
    14. Entorf, Horst & Spengler, Hannes, 2000. "Socioeconomic and demographic factors of crime in Germany: Evidence from panel data of the German states," International Review of Law and Economics, Elsevier, vol. 20(1), pages 75-106, March.
    15. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis of a Drug-Selling Gang's Finances," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 755-789.
    16. Grogger, Jeffrey, 1991. "Certainty vs. Severity of Punishment," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 297-309, April.
    17. Isaac Ehrlich, 1996. "Crime, Punishment, and the Market for Offenses," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 43-67, Winter.
    18. Ehrlich, Isaac, 1973. "Participation in Illegitimate Activities: A Theoretical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 521-565, May-June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Edward M. Shepard & Paul R. Blackely, 2010. "Economics of Crime and Drugs: Prohibition and Public Policies for Illicit Drug Control," Chapters, in: Bruce L. Benson & Paul R. Zimmerman (ed.), Handbook on the Economics of Crime, chapter 10, Edward Elgar Publishing.
    2. Lauridsen, Jorgen, 2010. "Is Polish Crime Economically Rational?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(2), pages 1-7.
    3. Lauridsen, Jørgen T. & Zeren, Fatma & Ari, Ayse, 2014. "Is crime in Turkey economically rational?," Discussion Papers on Economics 3/2014, University of Southern Denmark, Department of Economics.
    4. Paolo Buonanno & Daniel Montolio Estivill, 2005. "Identifying the Socioeconomic Determinants of Crime in Spanish Provinces," Working Papers in Economics 138, Universitat de Barcelona. Espai de Recerca en Economia.
    5. Loureiro, Paulo R.A. & Mendonça, Mário Jorge Cardoso de & Moreira, Tito Belchior Silva & Sachsida, Adolfo, 2009. "Crime, economic conditions, social interactions and family heritage," International Review of Law and Economics, Elsevier, vol. 29(3), pages 202-209, September.
    6. Araujo, Ricardo Azevedo & Moreira, Tito Belchior S., 2004. "A dynamic model of production and traffic of drugs," Economics Letters, Elsevier, vol. 82(3), pages 371-376, March.
    7. Lauridsen, Jørgen T. & Zeren, Fatma & Ari, Ay?E, 2015. "Is Crime in Turkey Economically Rational?/¿Es económicamente racional el crimen en Turquía?," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 33, pages 37-52, Enero.
    8. Jorgen Lauridsen, 2009. "Is Baltic Crime Economically Rational?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 9(1), pages 31-38, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Entorf, Horst & Winkler, Peter, 2001. "The economics of crime: investigating the drugs-crime channel: empirical evidence from panel data of the German states," ZEW Discussion Papers 01-37, ZEW - Leibniz Centre for European Economic Research.
    2. Entorf, H. & Winker, P., 2008. "Investigating the drugs-crime channel in economics of crime models: Empirical evidence from panel data of the German States," International Review of Law and Economics, Elsevier, vol. 28(1), pages 8-22, March.
    3. Lauridsen, Jørgen T. & Zeren, Fatma & Ari, Ay?E, 2015. "Is Crime in Turkey Economically Rational?/¿Es económicamente racional el crimen en Turquía?," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 33, pages 37-52, Enero.
    4. Lauridsen, Jørgen T. & Zeren, Fatma & Ari, Ayse, 2014. "Is crime in Turkey economically rational?," Discussion Papers on Economics 3/2014, University of Southern Denmark, Department of Economics.
    5. Bruno S. Frey, 2011. "Punishment – and Beyond," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 5(2), June.
    6. Guido Travaglini, 2003. "Property Crime and Law Enforcement in Italy. A Regional Panel Analysis 1980-95," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 62(2), pages 211-240, October.
    7. Lauridsen, Jorgen, 2010. "Is Polish Crime Economically Rational?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 40(2), pages 1-7.
    8. Entorf, Horst & Spengler, Hannes, 2008. "Is Being 'Soft on Crime' the Solution to Rising Crime Rates? Evidence from Germany," IZA Discussion Papers 3710, Institute of Labor Economics (IZA).
    9. Entorf, Horst & Spengler, Hannes, 2000. "Socioeconomic and demographic factors of crime in Germany: Evidence from panel data of the German states," International Review of Law and Economics, Elsevier, vol. 20(1), pages 75-106, March.
    10. Alejandro Gaviria & Carlos Medina & Jorge Tamayo, 2010. "Assessing the Link between Adolescent Fertility and Urban Crime," BORRADORES DE ECONOMIA 006860, BANCO DE LA REPÚBLICA.
    11. Horst Entorf & Hannes Spengler, 2015. "Crime, prosecutors, and the certainty of conviction," European Journal of Law and Economics, Springer, vol. 39(1), pages 167-201, February.
    12. Thomas A. Garrett & Lesli S. Ott, 2008. "City business cycles and crime," Working Papers 2008-026, Federal Reserve Bank of St. Louis.
    13. Hope Corman & Naci Mocan, 2015. "Alcohol Consumption, Deterrence and Crime in New York City," Journal of Labor Research, Springer, vol. 36(2), pages 103-128, June.
    14. O’Flaherty, Brendan & Sethi, Rajiv, 2015. "Urban Crime," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1519-1621, Elsevier.
    15. Loureiro, Paulo R.A. & Mendonça, Mário Jorge Cardoso de & Moreira, Tito Belchior Silva & Sachsida, Adolfo, 2009. "Crime, economic conditions, social interactions and family heritage," International Review of Law and Economics, Elsevier, vol. 29(3), pages 202-209, September.
    16. Milo Bianchi & Paolo Buonanno & Paolo Pinotti, 2012. "Do Immigrants Cause Crime?," Journal of the European Economic Association, European Economic Association, vol. 10(6), pages 1318-1347, December.
    17. William S. Reece, 2010. "Casinos, Hotels, And Crime," Contemporary Economic Policy, Western Economic Association International, vol. 28(2), pages 145-161, April.
    18. Altindag, Duha T., 2012. "Crime and unemployment: Evidence from Europe," International Review of Law and Economics, Elsevier, vol. 32(1), pages 145-157.
    19. Fafchamps, Marcel & Minten, Bart, 2006. "Crime, Transitory Poverty, and Isolation: Evidence from Madagascar," Economic Development and Cultural Change, University of Chicago Press, vol. 54(3), pages 579-603, April.
    20. Schneider, Andreas, 2019. "Deterrence Theory in Paraguay: Exploring Fraud and Violation of Trust Cases," MPRA Paper 102204, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:darddp:dar_224. 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: . General contact details of provider: https://edirc.repec.org/data/vwthdde.html .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vwthdde.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.