THE BECKER PARADOX AND TYPE I VERSUS TYPE II ERRORS IN THE ECONOMICS OF CRIME*

Two real‐world observations are not easily replicated in models of crime. First, although capital punishment is optimal in the standard Becker model, it is rarely observed in the real world. Second, criminal procedure and the evaluation of evidence vary across societies and historical periods, the standard of proof being sometimes very high and sometimes quite low. In this article, we develop a general equilibrium model of judicial procedure allowing for innocent persons being convicted. We show that the median voter theorem applies to this model, making judicial procedure endogenous. So formulated, the model can replicate both empirical observations.     

STREET CRIME AND STREET CULTURE*

A model shows how reputation concerns can support widespread street crime, a street culture, where the direct incentives for such behavior are weak. There are social benefits to street reputations, but those benefits are dominated when reputation concerns draw into crime those who obtain no direct gain from it. The model matches facts about violent crime that a standard model cannot easily explain including low monetary returns, disproportionate victimization of the young and poor, and high variance in rates across small distances. The model generates novel implications for policy and social science, including a negative effect of social capital.     

SOCIAL NETWORKS AND CRIME DECISIONS: THE ROLE OF SOCIAL STRUCTURE IN FACILITATING DELINQUENT BEHAVIOR*

Delinquents compete with each other in criminal activities but benefit from being friends with other criminals by learning and acquiring proper know‐how on the crime business. We study the subgame‐perfect Nash equilibrium of this game in which individuals decide first to work or to become a criminal and then the crime effort provided if criminals. We show that multiple equilibria with different numbers of active criminals and levels of involvement in crime activities may coexist and are only driven by the geometry of the pattern of links connecting criminals.     

EMPLOYMENT,DETERRENCE, AND CRIME IN A DYNAMIC MODEL*

Using maximum likelihood techniques and monthly panel data we solve and estimate an explicitly dynamic model of criminal behavior where current criminal activity impacts future labor market outcomes. We show that the threat of future adverse effects in the labor market when arrested acts as a strong deterrent to crime. Moreover, such forward‐looking behavior is estimated to be important. Hence, policies that weaken this deterrence will be much less effective in fighting crime. This suggests that prevention is more powerful than redemption since anticipated redemption allows criminals to look forward to negating the consequences of their crimes.     

THE EFFECTS OF CHINESE REGIONAL CONDITIONS ON THE LOCATION CHOICE OF JAPANESE AFFILIATES*

In the 1990s, Japanese firms rapidly increased the number of locations of their affiliates in China, displaying considerable regional heterogeneity in the abundance of better educated human resources, wage costs, increasing numbers of special economic zones, industrial agglomeration and the enrichment of social infrastructure. This paper employs conditional logit estimations to examine how these heterogeneous factors affect the location choice of Japanese affiliates by correlating Japanese data to data from Chinese provinces and Special Cities. The results reveal that factors related to human resources are more important than the ‘hard’ factors in attracting foreign firms to invest China.     

EDUCATION,WORK, AND CRIME: A HUMAN CAPITAL APPROACH*

This article develops a model of crime in which human capital increases the opportunity cost of crime from foregone work and expected costs associated with incarceration. Older, more intelligent, and more educated adults should commit fewer street (unskilled) crimes. White collar crimes decline less (or increase) with age and education. Predictions for age–crime and education–crime relationships receive broad empirical support in self‐report data from the National Longitudinal Survey of Youth and arrest data from the Uniform Crime Reports. The effects of education, training, and wage subsidies, as well as enforcement policies on criminal behavior are discussed.     

LOCAL LABOR MARKETS,JOB MATCHING,AND URBAN LOCATION*

We present a new way of modeling local labor markets by linking the space of workers' skills and the physical space of cities. The key lesson of our analysis is that firms exploit workers in these two spaces by setting wages that are below the competitive level. The degree of monopsony power depends on the elasticity of the firm's labor pool, which is inversely related to the costs workers incur in commuting and acquiring skills. Our analysis thus shows how socioeconomic ghettos emerge as workers with poor skill matches are also those who incur the highest commuting costs.     

日资和韩资企业在华投资的区位行为和模式研究

本文从经济区位论的角度出发,在实际问卷调查的基础上,就日资和韩资企业对华投资环境的评价进行了分析,在此基础上,对日资和韩资企业在华投资的区位行为、投资模式和投资区位空间演化等进行了研究。     

CRIME,DETERRENCE AND UNEMPLOYMENT IN ENGLAND AND WALES: AN EMPIRICAL ANALYSIS*

This paper uses aggregate data from 42 police-force areas over 12 years to test predictions of Becker's economic model of crime. The effects of measures for deterrence on the incidence of three types of acquisitive criminal activity (burglary, theft, robbery) in England and Wales are explored. Mixed support for the Becker model emerges. The growth in unemployment is seen to impact positively on two of the three types of criminal activity examined. Per capita household income is seen to have a negative effect on the recorded rates of burglary and theft, but there is some evidence that the income variable is a proxy for the effects of unemployment. Poor housing conditions and the relative youth of the population were also found to play a role in the determination of criminal activity.     

AN ON‐THE‐JOB SEARCH MODEL OF CRIME,INEQUALITY, AND UNEMPLOYMENT*

We extend simple search models of crime, unemployment, and inequality to incorporate on‐the‐job search. This is valuable because, although simple models are useful, on‐the‐job search models are more interesting theoretically and more relevant empirically. We characterize the wage distribution, unemployment rate, and crime rate theoretically, and use quantitative methods to illustrate key results. For example, we find that increasing the unemployment insurance replacement rate from 53 to 65 percent increases unemployment and crime rates from 10 and 2.7 percent to 14 and 5.2 percent. We show multiple equilibria arise for some fairly reasonable parameters; in one case, unemployment can be 6 or 23 percent, and crime 0 or 10 percent, depending on the equilibrium.     

BANKING CONCENTRATION AND FIRM GROWTH: THE ROLE OF SIZE,LOCATION AND FINANCIAL CRISIS

Using conditional quantile regressions for a panel of listed firms from euro‐area countries in the 2005–11 period, we explore the impact of banking concentration on firm growth between smaller and larger firms; core and periphery countries; in pre‐crisis and post‐crisis years. Our findings reveal that increasing banking concentration favours high‐growth larger‐sized firms located in periphery countries pre‐crisis. By contrast in post‐crisis years increasing banking concentration impacts negatively on low‐growth smaller firms irrespective of location, revealing their vulnerability.     

THE HOUSING STOCK,HOUSING PRICES,AND USER COSTS: THE ROLES OF LOCATION,STRUCTURE, AND UNOBSERVED QUALITY

Which housing characteristics are important for understanding homeownership rates? How are housing characteristics priced in rental and owner-occupied markets? What can answers to these questions tell us about economic theories of homeownership? Using the English Housing Survey, we estimate a selection model of property allocations to the owner-occupied and rental sectors. Structural characteristics and unobserved quality are important for selection. Location is not. Accounting for selection is important for rent-to-price ratio estimates and explains some puzzling correlations between rent-to-price ratios and homeownership rates. These patterns are consistent with, among others, hypotheses of rental market contracting frictions related to housing maintenance.