Llad Phillips1 Social Welfare The Impact of Crime on Society

SERIOUSNESS SURVEY RATE THE SERIOUSNESS OF EACH OF THE FOLLOWING BEHAVIORS ON A SCALE FROM ZERO( LEAST SERIOUS) TO TEN( MOST SERIOUS): 1. HOMICIDE___ 2. MASS POISONING ( e.g. TYLENOL)___ 3. FORCIBLE RAPE___ 4. ARSON: SET FIRE TO A GARAGE___ 5. SELLING HEROIN___ 6. AUTO THEFT___ 7. EMBEZZLEMENT OF $1,000___ 8. PROSTITUTE IN A HOUSE OF PROSTITUTION___ 9. POSSESSION OF MARIJUANA___ 10. SNIFFING GLUE___

Llad Phillips6 Social Welfare The Impact of Crime on Society

Llad Phillips7 Questions about crime n Is crime a real problem or a media induced problem? n Is crime an economic problem? n Are we getting our money’s worth for the dollars we spend on police, jails, and prisons?

Llad Phillips8 Taking Crimes n Robbery n Burglary n Auto Theft n Larceny

Llad Phillips9 How is Crime Measured n Victimization Surveys of Households u U S Dept of Justice, Bureau of Justice Statistics, Criminal Victimization n Citizen (Victim) Reports to Police u U S Dept of Justice, FBI, Uniform Crime Reports

Sourcebook of Criminal Justice Statistics, sourcebook Uniform Crime Reports

Llad Phillips11 Measures of Crime: Offense Rates n Thefts per 1000 registrations(FBI) = registrations per household* thefts per 1000 households(NCVS) u if registrations per household were growing in the 90’s then thefts per 1000 registrations would not fall as fast as thefts per 1000 households

Llad Phillips12 Trends In Crime in California Source: Crime and Delinquency in California,

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Llad Phillips15 California Crime Mix

Llad Phillips16 California Crime Index: Property Crimes

Llad Phillips17 California: Trend in Robberies Per Capita in 90’s

Llad Phillips18 Types of Robberies in California, 1998

Llad Phillips19 California: Armed Robberies, 54% of Total, By Weapon

Llad Phillips20 Two Perspectives On Crime n No Problem n It’s Bad

Llad Phillips21 Crime as Income Redistribution n The Robin Hood Myth u Take from the rich and give to the poor n The impact on social welfare u depends on your views or values F socialist versus a capitalist

Llad Phillips24 Crime as a dead weight loss n Loss of resouces spent on defense u protection of homes u protection of cars u protection of bicycles n Resources spent on defense u could be spent on goods and services F in the absence of crime n The impact on social welfare u Unambiguously bad

Llad Phillips25 What is the nature of crime? n Income redistribution? n or dead-weight loss?

Llad Phillips26 Economists Assume You Know What You Like n Lingo: economists call these consumer tastes or consumer preferences

Victim’s Income Thief’s Income

Victim’s Income Thief’s Income Thief’s Preferences 1. More is better, greedy 2. Indifferent to victim High Medium Low

Llad Phillips29 Economists Assume You Can make Comparisons n For example: the thief can compare a high level of his income and a low level of the victim’s income with a high level of his income and a high level of the victim’s income u in the case just illustrated, the thief values these the same since his income stays the same F the thief does not care whether the victim’s income is high or low, i.e. he is indifferent

Victim’s Income Thief’s Income Victim’s Preferences 1. more is better, greedy 2. indifferent to the thief lowmediumhigh

Victim’s Income Thief’s Income $6,000 Income Distribution

Victim’s Income $6,000 Income Distribution $12,000 Total or Social Income Line: Thief’s + Victim’s Income $12,000 Thief’s Income

Victim’s Income Thief’s Income $6,000 Income Distribution $12,000 Total or Social Income Line: Thief’s + Victim’s Income $12,000 Income Redistribution $9,000 $3,000

Llad Phillips34 Bad effects from taking crimes n Victim has less incentive to be productive n Victim has more incentive to spend time and money on defense n Analogous to war: guns vs. butter n What is society going to produce? u defense against crime? u or goods and services?

Victim’s Income Thief’s Income $6,000 Income Distribution $12,000 Total or Social Income Line: Thief’s + Victim’s Income $12,000 Income Redistribution $9,000 $3,000 $11,000 $1,000 social cost of defense $11,000

Crime Generation Offense Rate, Damages to Victims Fear Media Defense PrivatePublic

Llad Phillips37 Cost to Victims in US, 1993 Source: National Institute of Justice, Victim Costs and Consequences (1996)

Assaulter’s Income Victim’s Income Total or Social Income Motivation for Violence: Antagonism Assaulters Iso-preference Lines High Low

Llad Phillips39 Damages: US Violence, 1993 Source: National Institute of Justice, Victim Costs and Consequences (1996)

Llad Phillips40 Types of Crime n Motivation: self-interest, greed u Street Crimes: robbery, burglary, auto theft, larceny u White Collar: embezzlement, tax evasion, check fraud, telephone fraud u Status Offenses: runaway, truant, vagrant, beyond control of parents u Black Market: gambling, prostitution,drugs

Llad Phillips41 Types of Crime n Motivation: Hate, Rage u Street Crimes: homicide, aggravated assault, rape u Crimes Against Public Order: vandalism, terrorism u Hate Crimes F Columbine High F James Byrd: dragging death in Texas F Jewish Community Center in Granada Hills

Llad Phillips Reported Hate Crimes in California: 1998 Source: Hate Crime in California, 1998

Llad Phillips43 About 2/3 of Hate Crimes are Violent

Llad Phillips44 Sources of Information p. of syllabus n US Data u Sourcebook of Criminal Justice Statistics F u Bureau of Justice Statistics F

Llad Phillips45 Summary n Crime is an economic problem u loss of resources(dead weight loss) from private and public defense n Damages to victims are 3 times as high for crimes against persons compared to crimes against property u Total for 7 FBI Index Crimes: $ 95 Billion

Assaulter’s Income Victim’s Income Total or Social Income Motivation for Violence: Antagonism Assaulters Iso-preference Lines High Low

Llad Phillips47 Split Personality Behaviors Jack Hirshleifer: “The Expanding Domain of Economics” Choice Work and no violence Work and brawl in bars (Economic Man with episodes of antagonism)

choice Work and no violence Work and brawl in bars expect $24,000/yr Apprehended: lose 1 month in court and jail, $22, Not apprehended $24,000 Expected income: 0.1*$22, *$24,000 = $23,800

Llad Phillips50 Trends In Crime in California Source: Crime and Delinquency in California,