Question for help
Chapter 3
Measuring the Amount and Cost of Crime
Overview
Discuss sources of crime data used for empirical research and its limitations
Show the manner in which economists measure the economic burden of crime
It is likely that no data source gives an accurate measure of crime.
However, accuracy may not be necessary for successful empirical analysis and hypothesis testing. A measure that is biased but whose bias is consistent or random may be adequate for research purposes.
Incidence Reports
Incidence reports are generated when civilians report a crime to police officials.
Incidence reports require a law enforcement professional to organize an incidences reported from civilians into the proper type of crime it fits into.
This is important given the average citizen may not know the subtleties of crime types such as the differences between larceny, grand larceny, robbery, and burglary.
Incidence reports are usually able to distinguish when an incident is reported by multiple people and avoid counting an incident multiple times
Incidence Reports
Challenges with incidence reports
Generally, do not report victimless crime (illegal drugs, prostitution, etc)
Underreports rape and crimes involving small loses
Requires a sufficiently staffed police employee to accurately categorize each incident
Definitions
Robbery - the taking or attempting to take anything of value from the care, custody, or control of a person or persons by force or threat of force or violence and/or by putting the victim in fear.
Burglary - the unlawful entry of a structure to commit a felony or theft.
Larceny- the unlawful taking, carrying, leading, or riding away of property from the possession or constructive possession of another
In Florida, grand larceny is when the value of the item stolen is $300 or more
Arrest, Conviction, and Corrections Data
Data from criminal justice system generally contains the most precise and complete information on offenders.
However, plea bargains can change the final charge from the arrest charge.
Because of this most research does not consider fine distinctions among charges but rather deals in broader categories such as violent crime
Violent crime – Homicide, rape, robbery, aggravated assault
Property crime – Burglary, larceny, motor vehicle theft.
Arrest, Conviction, and Corrections Data
Two Limitations of criminal justice data
They are a highly selected sample of all individuals
Individuals who are arrested and convicted are differentiated by their apparent involvement in crime and their lack of skill in avoiding arrest and conviction.
Comparing arrest or conviction data across states does not necessarily indicate differences in crime rates, but also differences in involvement and skill of criminals and the degree of enforcement by the state/police.
Arrest, Conviction, and Corrections Data
Two Limitations of criminal justice data
Treatment of individuals within the criminal justice system is based on perceptions of their potential for being involved in crime.
For example, people who have a more likely to be involved in with crime in the future are given harsher sentences.
This makes studying the effects of longer sentences on recidivism challenging given that there is selection bias in those receiving the treatment of longer sentences.
Victimization Surveys
Asks people to recall crimes that they were victims of or witnessed
Tend to produce higher estimates of crime than incidence reports
Victims are more likely to report small property violations and sexual crimes
It is more difficult to detect duplicate incidences
Individuals may wrongly report something as a crime that is actually a civil dispute
However, victimization surveys can provide valuable information for victimless crimes.
Cash Flows and Macroeconomics Indicators
General activity level of the underground economy can be detected by variation in transactions observed passing through the banking system.
Transactions that take place on credit cards or involve debit cards or check are generally thought to reflect legal activity.
Currency is the choice of the underground/illegal market.
A rise in currency holdings as a fraction of demand deposits in an area indicates that the underground economy is growing faster than the legal economy.
Commonly Used Datasets
FBI Uniform Crime Reporting Program (UCR)
Includes count of crime types by agency
When a crime could fit into multiple categories, it is counted as the crime that is highest in severity
Very high percent of agencies submit reports to UCR and have been reporting since 1990s
National Incident-Based Reporting System (NIBRS)
Gives a detailed report on every incidence of crime
Not commonly reported to, but soon all agencies will be required to.
Commonly Used Datasets
Supplemental Homicide Report
Provides details of all known homicides in the country
Includes information on victims, offenders, weapon type, justifiability,
Measuring the Economic Burden or Cost of Crime
Estimating the economic cost of crime is a major research undertaking.
Anderson (1999) estimated that the burden of crime in the United States in 1997 was $1.2 trillion, 14% of GDP.
Economic costs of crime include
Costs of the criminal justice system (from enforcement to prisons)
Expenditures to potential victims to avoid crime
Costs experienced by victims (physical harm, medical expenditures, psychological effects)
All the resources used by offenders in the process of offending, avoiding arrest, fighting conviction, and the opportunity cost of time spent in prison
Breakdown of the Costs of Crime
8.5% - Expenditures for police, courts, and corrections.
13.3% - Expenditures of on producing and distributing illegal substances (This is the opportunity cost of producing illegal drugs
16.7% - Private expenditures for locks, guards, security systems, cyber security, etc.
44.5% - Loss of life, medical expenditures, and injury to offenders, victims, and bystanders.
3.0% - Opportunity costs of offenders time
7.6% - The time potential victims spend securing assets and lost work time due to injury
Quiz
Overtime parking at meters, that is, staying in the parking spot after the meter has expired, imposes costs on those seeking to park, perhaps to shop or work. However, metered parking is costly to enforce because, compared to revenue from meters, the cost of meter readers who write tickets is high. This suggests raising the fine for overtime parking from, say, $20 to $200 or even $2,000. What are two unintended consequences that might result from these much higher fines?
Answer: These high fines could cause police agencies use it as a significant source of revenue and begin to maximize revenue rather than public welfare. These high fines could also externalities in the form of anxiety and extreme compliance by law abiding citizens.