Llad Phillips1 Jobs and Crime

Llad Phillips2 A theme for this course US and CA criminal justice systems will be case studies, but are there larger issues about the public sector? US and CA criminal justice systems will be case studies, but are there larger issues about the public sector?

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5 Public Sector Health Safety Civics Education

Llad Phillips6 What determines the quality of life in a nation, a state or a locality? The distribution of GDP between the public and private sectors?

Llad Phillips7 Total Tax Burden As % of GDP, 2004 Google Forbes overall tax burden CountryTotal Tax burden Sweden50.7% France43.7 UK36.1 Germany34.8 Canada33.0 Switzerland29.4 USA25.5 Mexico18.5

Llad Phillips8 Public Vs. Private Goods Labor for Public Goods Labor for Private Goods Contraint Labor, Private Private Goods Production Function

Llad Phillips9 L, public Output, Public L, Private Output, Private Production Possibility Frontier

Llad Phillips10 L, public Output, Public L, Private Output, Private Production Possibility Frontier

Llad Phillips11 Private Public Sweden UK US Mexico Canada

Llad Phillips12 Production Possibility Frontier PRIVATE PUBLIC Inefficient Does the global economy Cause a bias towards Private instead of public Goods and services?

Llad Phillips13 Production Possibility Frontier Public Goods: Defense Public Goods: Health Inefficient Does being the world’s Policeman cause a bias Away from other public Goods and services?

Llad Phillips14 Expenditures Per Pupil FiscalYear CARank Nominal $, CA US

Llad Phillips15 Production Possibility Frontier Public Goods: Prison Operation Public Goods: education Inefficient Which would you rather do (1) keep the 30% of state prisoners who are pot-heads locked up, or (2) educate your kids?

Llad Phillips16 US Politics “It’s the economy stupid!” “It’s the economy stupid!” Issues in 2008 Issues in 2008  Human capital and education  The family and social conservatives  Huck & Chuck  Mitt

Llad Phillips % 7.3% 31.0/33.8~8.6 decline

Llad Phillips % 5.8% 7.3/5.8 ~ 26% rise

Llad Phillips19 The Economy and Crime Is crime affected by the business cycle? Is crime affected by the business cycle? Do economic factors cause crime? Do economic factors cause crime?

Llad Phillips20 Where is the economy headed? Survey of Professional Forecasters tml

Llad Phillips21 Governor’s Budget Summary Jan 1990 Jan 2007

Llad Phillips22 California Forecasts & Record: Umemployment rate: CA Dept. of Finance Year CA6.2%5.4%4.9%5.3%5.7%5.6%5.5% US5.5%5.1%4.6%4.6%5.0%5.0%4.8%

Llad Phillips23 Outline Seriousness Survey Seriousness Survey  What can we learn from the survey? Crime File Crime File  Victims  Jobs and Crime Jobs and Crime Jobs and Crime  Why do some people get involved with crime?

Llad Phillips24 Class Survey 2009 Vs. Sample 2008 Scoring Ten Behaviors Scoring Ten Behaviors 103 responses in ’09, 97 responses in ‘ responses in ’09, 97 responses in ‘08

Llad Phillips25 SERIOUSNESS SURVEY RATE THE SERIOUSNESS OF EACH OF THE FOLLOWING BEHAVIORS ON A SCALE FROM ZERO( LEAST SERIOUS) TO TEN( MOST SERIOUS): MEDIAN ‘08 ‘09 1. HOMICIDE _10 10__ 2. MASS POISONING ( e.g. TYLENOL) _ 9 10__ 3. FORCIBLE RAPE _ 10 10__ 4. ARSON: SET FIRE TO A GARAGE _ 8 7__ 5. SELLING HEROIN _ 7 7__ 6. AUTO THEFT _ 6 6__ 7. EMBEZZLEMENT OF $1,000 _ 5 6__ 8. PROSTITUTE IN A HOUSE OF PROSTITUTION _ 4 4__ 9. POSSESSION OF MARIJUANA _ 2 1__ 10. SNIFFING GLUE _ 1 1__

Llad Phillips26 Conclusions Consistency from year to year Triage is possible: we can separate the more serious behaviors from the less serious behaviors

Llad Phillips27 Distribution of Homicide Scores One 1 One 6 One 7 Six 8’s Four 9’s Median: 52 nd Person 90

Llad Phillips28 Mode = 10, most likely number Median = 10, score of 49 th or middle person

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Llad Phillips30 Conclusions Consistency from year to year Triage is possible: we can separate the more serious behaviors from the less serious behaviors For serious behaviors, a clear majority view   For example, for homicide 102 out of 103 score it between 6 and 10, while 100 out of 103 score it between 8 and 10

Llad Phillips31 Central Limit theorem in Action

Llad Phillips32 2.5% mean

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Llad Phillips34 Mode: 10 Median: 10

Llad Phillips The Vocal Minority: sixteen score Pot high

Llad Phillips36 Mode: 1 Median: 2

Llad Phillips37 Center of the Scores Distribution Mode: most likely Mode: most likely Median: middle person Median: middle person Average: sum of scores divided by total number of people Average: sum of scores divided by total number of people

Llad Phillips38 John Tukey: Box Plot for Sniffing Glue Econ 160 W 2009 Smallest = 0 Q1 = 0 Median = 1 Q3 = 3 Largest = 10 IQR = 3 Outliers: 10, 10, 10, 9, 8, 8, 8, Median 16 folks score as 4 or above 73 folks score as 2 0r below Fight for 14 3’s

Llad Phillips39 Conclusions Consistency from year to year Triage is possible: we can separate the more serious behaviors from the less serious behaviors For serious behaviors, a clear majority view   For example, for homicide 102 out of 103 score it between 6 and 10, while 100 out of 103 score it between 8 and 10 The less serious behaviors are more controversial!

Llad Phillips40 Dispersion of Scores Distribution Measures of dispersion Measures of dispersion  Standard deviation  Inter-quartile range  Range: Maximum - Minimum

Llad Phillips41 SERIOUSNESS SURVEY RATE THE SERIOUSNESS OF EACH OF THE FOLLOWING BEHAVIORS ON A SCALE FROM ZERO( LEAST SERIOUS) TO TEN( MOST SERIOUS): Minimum, Maximum 1. HOMICIDE _2, MASS POISONING ( e.g. TYLENOL) _0, FORCIBLE RAPE _6,10 4. ARSON: SET FIRE TO A GARAGE _2, SELLING HEROIN _0, AUTO THEFT _3, EMBEZZLEMENT OF $1,000 _0, 9 8. PROSTITUTE IN A HOUSE OF PROSTITUTION _0, POSSESSION OF MARIJUANA _0, SNIFFING GLUE _0, 8

Llad Phillips42 The more serious the behavior, the less disagreement about policy

Llad Phillips43 Policy is easier Policy is more difficult

Llad Phillips44 Bureau of Justice Statistics, Report to the Nation The Alternative p.170 One more step: converting seriousness scores to a metric (years of sentence or Loss rate of $) The Economics of Crime Control, Ch. 4

Llad Phillips45 Source: $ 1.54 Million (1990), Orley Ashenfelter, Princeton, Based on highway safety

Llad Phillips46 Types of Crime Motivation: self-interest, greed Motivation: self-interest, greed  Street Crimes: robbery, burglary, auto theft, larceny  White Collar: embezzlement, tax evasion, check fraud, telephone fraud  Status Offenses: runaway, truant, vagrant, beyond control of parents  Black Market: gambling, prostitution,drugs

Llad Phillips47 Types of Crime Motivation: Hate, Rage Motivation: Hate, Rage  Street Crimes: homicide, aggravated assault, rape  Crimes Against Public Order: vandalism, terrorism  Hate Crimes  Columbine High  James Byrd: dragging death in Texas  Jewish Community Center in Granada Hills

Llad Phillips48 Jobs and Crime

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Llad Phillips50 Questions About Crime Does the Business Cycle Affect Crime Rates? Does the Business Cycle Affect Crime Rates? Does an Individual’s Life Cycle Affect Crime Rates? Does an Individual’s Life Cycle Affect Crime Rates? Why do some people live socially unproductive lives? Why do some people live socially unproductive lives?

Llad Phillips51 Two Points About Economic Conditions and Crime Relationship of Crime to the Business Cycle Relationship of Crime to the Business Cycle  Short Run: Business Cycle  Is Phil Cook wrong?  California: the misery index and crime  misery index = unemployment rate + inflation rate Relationship of Crime to the Life Cycle Relationship of Crime to the Life Cycle  Long Run  Investment in Education  Role of the Family

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Llad Phillips54 CA Crime Index(t) = a +b*Misery Index(t)

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Llad Phillips59 Why do people work in labor market? Tastes? Assume everybody has the same tastes! Human capital: earning power   Education   Work experience   Health

Llad Phillips60 An Individual’s Life Cycle for a Socially Productive Life Learning over the life cycle Learning over the life cycle Accumulating earning power or human capital Accumulating earning power or human capital Earnings depend upon Earnings depend upon  ability  knowledge  work experience

Llad Phillips61 Productive Life Cycle Social Institution Family - PreSchool - School - College - Job - Retirement Function Learning: Accumulating Human Capital - Earning - Spending Age Line

Llad Phillips62 Accumulating Human Capital InflowOutflow Stock

Llad Phillips63 Accumulating Human Capital Stock Inflow + - Outflow Net Inflow

Llad Phillips64 Accumulating Human Capital Human Capital Learning + - Depreciation Investment

Llad Phillips65 Allocation of Your Time Human Capital Build Capital by Learning Use Capital for Earning

Llad Phillips66 Time Endowment 24 hours

Llad Phillips67 24 hours0 hours Leisure (learning)

Llad Phillips68 Allocation of Your Time Human Capital Build Capital by Learning Use Capital for Earning

Llad Phillips69 24 hours0 hours Leisure (learning) Earnings $480 Opportunities for trading leisure for earnings (income) at a rate, $20 per hour, determined by your stock of human capital $ 0

Llad Phillips70 Salaries by Education Level, CA Full Time* Workers *Full Time: >35 hrs/wk, >48 wks/yr.; Source: LA Times,

24 hours0 hours Leisure (learning) Earnings $480 $ 0 $240 dropout college grad

Llad Phillips72 Economists Assume You Can make Comparisons For example: you can compare a high level of your income and a low level of your leisure with a low level of your income and a high level of your leisure For example: you can compare a high level of your income and a low level of your leisure with a low level of your income and a high level of your leisure

24 hours0 hours Leisure (learning) Earnings $480 $ 0 Iso-Preference Curves: You value all points on a curve equally high low value high value

24 hours0 hours Leisure (learning) Earnings $480 $ 0 high low value high value Optimum 15 hours of leisure $180 for 9 hrs of work

24 hours0 hours Leisure (learning) Earnings $480 $ 0 high low value slope of the iso-preference curve through the 24 hour endowment is the lowest wage at which you are willing to work

24 hours0 hours Leisure (learning) Earnings $480 $ 0 high low value slope of the iso-preference curve through the 24 hour endowment is the lowest wage at which you are willing to work $96 dropout is unwilling to work for $4/hr

Llad Phillips77 Participation in the Labor Force: Willing to look for work If your market wage exceeds your reservation wage If your market wage exceeds your reservation wage  college participates  the junior high $4/hr, does not We assumed the college grad and the dropout both have the same values for income and leisure We assumed the college grad and the dropout both have the same values for income and leisure Only their learning histories differ Only their learning histories differ

24 hours0 hours Leisure (learning) Earnings $480 $ 0 high low value slope of the iso-preference curve through the 24 hour endowment is the lowest wage at which you are willing to work $96 dropout is unwilling to work for $4/hr

Llad Phillips79 Hazards to Personal Success Dropping out Dropping out Joining gangs Joining gangs Anti-social behavior Anti-social behavior

Llad Phillips81 Productive Life Cycle Social Institution Family - PreSchool - School - College - Job - Retirement Function Learning: Accumulating Human Capital - Earning - Spending Age Line

Legal Work or Illegal Work? Choice with Uncertain Outcomes Choice Legal work Illegal work

Legal Work or Illegal Work? Choice with Uncertain Outcomes Choice Legal work Illegal work Unemployed (fail) Employed (succeed) Apprehended (fail) Not Apprehended (succeed)

Legal Work or Illegal Work? Choice with Uncertain Outcomes Choice Legal work Illegal work Unemployed (fail) Employed (succeed) Apprehended (fail) Not Apprehended (succeed) $0 $12,000/yr $0 $14,000

Expected legal Income = 0.9*$12,000 = $10,800 Legal Work or Illegal Work? Choice with Uncertain Outcomes Choice Legal work Illegal work Unemployed (fail) Employed (succeed) Apprehended (fail) Not Apprehended (succeed) $0 $12,000/yr $0 $14,000/yr Expected illegal income = 0.8*$14,000 = $11,200

Expected legal Income = 0.95*$12,000 = $11,400 Legal Work or Illegal Work? Choice with Uncertain Outcomes Choice Legal work Illegal work Unemployed (fail) Employed (succeed) Apprehended (fail) Not Apprehended (succeed) $0 $12,000/yr $0 $14,000/yr Expected illegal income = 0.8*$14,000 = $11,

Llad Phillips87 Social Measures to Reduce Crime Maintain a full-employment economy Maintain a full-employment economy

Expected legal Income = 0.9*$12,000 = $10,800 Legal Work or Illegal Work? Choice with Uncertain Outcomes Choice Legal work Illegal work Unemployed (fail) Employed (succeed) Apprehended (fail) Not Apprehended (succeed) $0 $12,000/yr $0 $14,000/yr Expected illegal income = 0.7*$14,000 = $9,

Llad Phillips89 Social Measures to Reduce Crime Maintain an Effective Criminal Justice System Maintain an Effective Criminal Justice System  keep the probability of apprehension high

Expected legal Income = 0.9*$12,000 = $10,800 Legal Work or Illegal Work? Choice with Uncertain Outcomes Choice Legal work Illegal work Unemployed (fail) Employed (succeed) Apprehended (fail) Not Apprehended (succeed) $0 $12,000/yr $3,000 (fine) $14,000/yr Expected illegal income = 0.8*$14, *$3,000 = $10,600 $0

Llad Phillips91 Social Measures to Reduce Crime Punish the criminal Punish the criminal  make crime less attractive

Llad Phillips92 Social Measures to Reduce Crime Maintain a full-employment economy Maintain a full-employment economy Maintain an Effective Criminal Justice System Maintain an Effective Criminal Justice System  keep the probability of apprehension high Punish the criminal Punish the criminal  make crime less attractive

Llad Phillips93 Summary Your economic status affects your probable behavior: work or crime Your economic status affects your probable behavior: work or crime Earning power affects your probable behavior Earning power affects your probable behavior When you are are a young teen you need a parent or role model to motivate you to stay in school and keep learning When you are are a young teen you need a parent or role model to motivate you to stay in school and keep learning

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Llad Phillips96 Class Survey 2003 Scoring Ten Behaviors Scoring Ten Behaviors 113 Responses 113 Responses No two are the same No two are the same Two most similar responses Two most similar responses Two most different responses Two most different responses

Llad Phillips97 Similar Scorings

Llad Phillips98 Different Scorings

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Llad Phillips101 Mean Rating

Llad Phillips102 SERIOUSNESS SURVEY RATE THE SERIOUSNESS OF EACH OF THE FOLLOWING BEHAVIORS ON A SCALE FROM ZERO( LEAST SERIOUS) TO TEN( MOST SERIOUS): MEDIAN ‘03 ‘05 1. HOMICIDE _10 10__ 2. MASS POISONING ( e.g. TYLENOL) _ 9 8__ 3. FORCIBLE RAPE _ 9 9__ 4. ARSON: SET FIRE TO A GARAGE _ 7 7__ 5. SELLING HEROIN _ 6 6__ 6. AUTO THEFT _ 5.5 6__ 7. EMBEZZLEMENT OF $1,000 _ 4 4__ 8. PROSTITUTE IN A HOUSE OF PROSTITUTION _ 3 3__ 9. POSSESSION OF MARIJUANA _ 2 2__ 10. SNIFFING GLUE _ 1 1__

Llad Phillips103 Misery Index, California year Rate unemployment rate inflation rate misery index

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Llad Phillips106 How best to Learn in a Lecture class That does not Have a Section? We Recommend Going to class. The questions On the exams Are from topics Discussed in Class. How much math does 160 require? 1.Descriptive Graphs 2. Analytical Graphs (exams) 3. Notation e.g OF=f(CR,SE,SV)

Llad Phillips107 Mode = 10, largest number of responses Median = 10, score of 31st person

Llad Phillips108 Mode = 10, largest number of responses Median = 10, score of 49 th person

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Llad Phillips110 Mode = 9 Median = 9

Llad Phillips111 Mode = 1 Median = 1

Llad Phillips Frequency Score Number of Responses Vs. Possession of Pot Score ‘02

Llad Phillips113 Disagreement Versus Seriousness, 02 Arson Selling Heroin Auto Theft Embezzle Mass Poisoning Rape Homicide Prostitute Possess Pot Sniff Glue Score Dispersion (Standard Deviation) Homicide 2004

Embezzlement Standard Deviation or Dispersion

Llad Phillips115 John Tukey: Box Plot for Pot ‘09 Smallest = 0 Q1 = 1 Median = 1 Q3 = 3 Largest = 8 IQR = 2 Outliers: 8, 8, 8, 7,

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