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Lessons from the Economics of Crime

Lessons from the Economics of Crime: What Reduces Offending?

Philip J. Cook
Stephen Machin
Olivier Marie
Giovanni Mastrobuoni
Copyright Date: 2013
Published by: MIT Press
Pages: 240
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  • Book Info
    Lessons from the Economics of Crime
    Book Description:

    Economists who bring the tools of economic analysis to bear on the study of crime and crime prevention contribute to current debates a normative framework and sophisticated quantitative methods for evaluating policy, the idea of criminal behavior as rational choice, and the connection of individual choices to aggregate outcomes. The contributors to this volume draw on all three of these approaches in their investigations and discuss the policy implications of their findings.Reporting on research in the United States, Europe, and South America, the chapters discuss such topics as a cost-benefit analysis of additional police hiring, the testing of innovative policy interventions through field experiments, imprisonment and recidivism rates, incentives and disincentives for sports hooliganism ("hooliganomics"), data showing the influence of organized crime on the quality of local politicians, and the (scant) empirical evidence for the effect of immigration on crime. These contributions demonstrate the eclectic approach of economists studying crime as well as their increasing respect for the contributions of other social scientists in this area.ContributorsBrian Bell, Paolo Buonanno, Philip J. Cook, John J. Donohue III, Jeffrey R. Kling, Jens Ludwig, Stephen Machin, Olivier Marie, Giovanni Mastrobuoni, Sendhil Mullainathan, Aurélie Ouss, Emily Greene Owens, Stefan Pichler, Paolo Pinotti, Mikael Priks, Daniel Römer, Rodrigo R. Soares, Igor Viveiros

    eISBN: 978-0-262-31463-3
    Subjects: Economics, Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Series Foreword
    (pp. vii-viii)

    This book is part of the CESifo Seminar Series. The series aims to cover topical policy issues in economics from a largely European perspective. The books in this series are the products of the papers and intensive debates that took place during the seminars hosted by CESifo, an international research network of renowned economists organized jointly by the Center for Economic Studies at Ludwig-Maximilians-Universität, Munich, and the Ifo Institute for Economic Research. All publications in this series have been carefully selected and refereed by members of the CESifo research network....

  4. Crime Economics in Its Fifth Decade
    (pp. 1-16)
    Philip J. Cook, Stephen Machin, Olivier Marie and Giovanni Mastrobuoni

    It is not unusual these days to have a group of economists gather to discuss their research on crime. In Europe and the Americas, a critical mass of academic economists have specialized in the study of crime and its control, and there is now a steady flow of economics doctoral dissertations on this topic. As we near the fiftieth anniversary of Gary Becker’s seminal contribution to this field (Becker 1968), it is fair to say that the economics of crime is no longer a “fringe” topic, but part of the standard portfolio that makes up the discipline of economics.


  5. I Policy Choice and Normative Framework

    • 1 COPS and Cuffs
      (pp. 17-44)
      Emily Greene Owens

      There is a general consensus among academics that a 10 percent increase in the number of police officers will reduce crime rates by between 3 and 10 percent,¹ and that hiring more police officers is almost certainly a more effective way to reduce crime than increasing punishment severity (Durlauf and Nagin 2011). Knowing that the elasticity of crime with respect to police is negative and relatively large is critical to our understanding of criminal behavior and the criminal justice system, but this knowledge is incomplete; the elasticity of crime with respect to police is necessary but not sufficient to design...

    • 2 Drug Prohibition and Its Alternatives
      (pp. 45-66)
      John J. Donohue III

      Illegal drugs, alcohol, and tobacco impose large social costs on society, here and in every major developed country. Interestingly, each of these is estimated—albeit crudely—to impose about $200 billion per year in social costs in the United States (although the costs come in very different forms depending on the nature of the legal regime and enforcement policy). These three substances also share some interesting characteristics: many Americans have a serious attachment to one or more of them, and a sizable proportion of the consumers use one or more of these in a responsible manner, hence imposing little-to-no external...

    • 3 Mechanism Experiments for Crime Policy
      (pp. 67-92)
      Jens Ludwig, Jeffrey R. Kling and Sendhil Mullainathan

      Randomized controlled trials are increasingly used to evaluate policies, including in the area of crime policy research. For example, solicitations for research proposals from the US Department of Justice’s (DOJ) National Institute of Justice now regularly prioritize studies that randomize people to treatment or control conditions. This trend has been spurred in part by numerous independent groups—the Coalition for Evidence-Based Policy, the Campbell Collaboration, an international network of researchers hosted by the Norwegian Knowledge Center for the Health Services, the Poverty Action Lab, and Innovations for Poverty Action—that promote policy experimentation. Others however question the wisdom of this...

  6. II Crime as a Rational Choice

    • 4 What Works in Reducing Re-Offending?
      (pp. 93-110)
      Aurélie Ouss

      In the 1990s, 26 different laws, informally known as “three strikes laws,” were passed in the United States. These laws imposed long and mandatory sentences on repeat offenders for the purpose of reducing recidivism. The special treatment of recidivism in the criminal-justice system was expressed inEwing v. California Supreme Court.¹ Ewing had appealed a lower court’s sentence of 25 years for a “third strike” burglary offense² as disproportionate, but the Court denied his appeal on the ground that “[his] sentence is justified by the State’s public-safety interest in incapacitating and deterring recidivist felons, and amply supported by his own...

    • 5 The Young Prisoner’s Dilemma: Juvenile: Recidivism in Germany
      (pp. 111-130)
      Stefan Pichler and Daniel Römer

      The optimal punishment of criminal acts represents a trade-off. On the one hand, classic theory (e.g., Becker 1968) suggests that more severe punishments lead to higher general deterrence and thus to less crime. On the other hand, too harsh sentences can reduce future income opportunities and thereby increase the likelihood of re-offending. This view of punishment has gained prominence over the last decade, as modern economic models consider additional incentives beyond basic payoff maximization. Today, in the particular case of incarceration, different channels have been identified that can stimulate recidivism. Psychologists have found long-term imprisonment to increase the taste for...

    • 6 What Works in Reducing Hooliganism?
      (pp. 131-148)
      Mikael Priks

      Sports fan violence has plagued many countries throughout history. An early incident occurred in the amphitheater in Pompeii, 19 years before the volcano. Citizens of Pompeii and the neighboring city Nuceria were cheering different gladiators as hooligan violence broke out. As a result “many families from Nuceria lost a father or a son” (Tacitus,Annals, AD 14–68, bk 24, p. 109). In Constantinople in 532, team cheering at chariot races escalated from insults to mob riots, which finally led to some 30,000 deaths and laid the town in ruins. Much later, in 1314, soccer was banned in London for...

  7. III Feedback and Interactions

    • 7 Crime and Immigration: What Do We Know?
      (pp. 149-174)
      Brian Bell and Stephen Machin

      It is commonplace, in many countries, to hear some politicians, media commentators, and members of the general public assert that immigrants harm the labor market prospects of natives. Indeed there is a very large, sometimes controversial, academic literature that investigates whether one can marshal evidence to support this assertion (e.g., see Borjas 1999; Card 2005, 2009). Similarly a view often expressed is that immigrants cause crime when they locate in foreign countries. Yet this key question has received far less attention than the labor market work. This seems surprising given that the economic and social costs of crime are usually...

    • 8 Organized Crime, Violence, and the Quality of Politicians: Evidence from Southern Italy
      (pp. 175-188)
      Paolo Pinotti

      The presence of criminal organizations represents one of the main obstacles to the economic growth and development of several regions and countries around the world. Besides the immediate costs imposed by violence and predatory activities, such organizations may take advantage of their economic and military power to influence the political decision-making process.

      For instance, criminals may want to attract public investments toward their geographic areas of influence, as public works and procurement contracts traditionally represent important profit opportunities for mafia-type organizations. Indeed mafia rackets often force firms to purchase overpriced inputs or hire individuals that are close to the organization....

    • 9 Centralized versus Decentralized Police Hiring in Italy and the United States
      (pp. 189-204)
      Paolo Buonanno and Giovanni Mastrobuoni

      Crime and crime-preventing strategies impose relevant costs on society and are often in the political debate. Crime influences individual welfare, even of non-victims (Cornaglia and Leigh 2011; Dustmann and Fasani 2011) and expected economic returns through investment choices. The social and economic costs related to criminal activities should increase policy makers’ awareness of how to achieve a significant reduction in crime rates through adequate policy interventions. In particular, provision of public safety is one the primary policy objectives of both central and local government. Police forces are responsible for public safety, representing one of the main instruments policy makers have...

    • 10 The “Program of Integration and Management in Public Safety” in Minas Gerais, Brazil: A Descriptive Analysis
      (pp. 205-232)
      Rodrigo R. Soares and Igor Viveiros

      The main police forces in Brazil are organized at the state level, centered at two independent institutions. The Military Police is a militarized uniformed police force responsible for ostensive patrolling, urban traffic control, immediate responses to crime, and so on. The Civil Police is a judiciary police force, responsible for investigations and general assistance to the judiciary power. Besides having different responsibilities, these police forces have different geographic jurisdictions, hierarchical structures, and state agencies they report to.

      In Brazil, the lack of coordination between these two law enforcement bodies and constant jurisdictional conflicts have recurrently been identified as major obstacles...

  8. Contributors
    (pp. 233-234)
  9. Index
    (pp. 235-242)