Embed Size (px)
Citation preview
Llad Phillips 1
Jobs and CrimeJobs and Crime
Llad Phillips 2
Week One: Tuesday & ThursdayWeek One: Tuesday & Thursday
Llad Phillips 3
Summary for Lecture TwoSummary for Lecture Two Crime is an economic problemCrime is an economic problem
loss of resources(dead weight loss) from private loss of resources(dead weight loss) from private and public defense (graphical economic analysis)and public defense (graphical economic analysis)
Damages to victims are 3 times as high for Damages to victims are 3 times as high for crimes against persons compared to crimes crimes against persons compared to crimes against propertyagainst property Total for 7 FBI Index Crimes: $ 95 Billion (93 $)Total for 7 FBI Index Crimes: $ 95 Billion (93 $)
Shouldn’t society focus more on big ticket fraud: Enron, WorldCom, Bernard Madoff Investment Securities LLC?
Llad Phillips 4
TodayToday Policy Issue: Gun Laws Seriousness ratings for ten behaviors
How much would you pay to prevent your bike being stolen?
Experimental issue: Do economic conditions cause crime?
Llad Phillips 5
How to study for this course!How to study for this course! Lecture course: go to lectures
No section and no TA Look at outline slide at the beginning of each lecture with
the major points and a summary slide at the end of each PowerPoint with the major points
Be familiar with the graphical analysis in the class notes & the PowerPoints
Look at last Winter’s (2011) midterm for clues Read (listen, look, Google) the news and keep up with
criminal justice system stories
Llad Phillips 6
Example:Summary for Lecture TwoExample:Summary for Lecture Two
Crime is an economic problemCrime is an economic problem loss of resources(dead weight loss) from private loss of resources(dead weight loss) from private
and public defenseand public defense Damages to victims are 3 times as high for Damages to victims are 3 times as high for
crimes against persons compared to crimes crimes against persons compared to crimes against propertyagainst property Total for 7 FBI Index Crimes: $ 95 Billion (93 $)Total for 7 FBI Index Crimes: $ 95 Billion (93 $)
Shouldn’t society focus more on big ticket fraud: Enron, WorldCom, Bernard Madoff Investment Securities LLC?
Llad Phillips 7
Example: Outline and Issues for Lecture TwoExample: Outline and Issues for Lecture Two Course logistics: gauchospaceCourse logistics: gauchospace Criminal Justice System (CJS) & economic Criminal Justice System (CJS) & economic
paradigm: where do the values (prices) come paradigm: where do the values (prices) come from to evaluate the states (outcomes) of the from to evaluate the states (outcomes) of the CJS?CJS?
How much crime is there? How do we know?How much crime is there? How do we know? Crime has two effects:Crime has two effects:
Redistribution of welfare from the victim to the Redistribution of welfare from the victim to the perpetratorperpetrator
Opportunity cost or waste of resources for defenseOpportunity cost or waste of resources for defense
Llad Phillips 8
The Graphics of Total Cost, TCThe Graphics of Total Cost, TCTC = r*OF + ETC = r*OF + EThe Graphics of Total Cost, TCThe Graphics of Total Cost, TCTC = r*OF + ETC = r*OF + E
88
$
E on CJS
Total Cost (E)
Minimum Cost
Optimal Expenditure
Economic Paradigm1. Choose objective
e. g. minimize sum ofdamages to victims plus expenditures, E, on CJS
2. Describe states of the world (options for choice)
Total cost curve (E)
3. Choose the best option
Llad Phillips 9
Llad Phillips 10
Llad Phillips 11
Llad Phillips 12
MidtermI. 40II. 20III. 40IV. 50
Llad Phillips 13
Stories still in the newsStories still in the news
Congresswoman Gabrielle Giffords
Llad Phillips 14
What is the gun law in Arizona?What is the gun law in Arizona? Q: Is there a waiting period on gun sales? Q: Are handgun buyers required to
complete safety training? Q: Is it required that you register all of your
guns with law enforcement? Q: Are background checks required at gun
shows? Q: Do state police and federal NICS
perform a background check?
Llad Phillips 15
What is the gun law in Arizona?What is the gun law in Arizona? Q: Is it mandatory that locking devices be
sold with guns? Q: Is a license or permit required to buy
handguns? Q: Are background checks required on
'private' gun sales? Q: Are there any restrictions regarding
minors possessing guns? Q: May the police limit carrying concealed
handguns?
Llad Phillips 16
Llad Phillips 17
Llad Phillips 18
Llad Phillips 19
Llad Phillips 20
A theme for this courseA theme for this course US and CA criminal justice systems will be US and CA criminal justice systems will be
case studies, but are there larger issues about case studies, but are there larger issues about the public sector?the public sector?
Llad Phillips 21
Llad Phillips 22
Llad Phillips 23
Public Sector
Health
Safety
Civics
Education
Llad Phillips 24
What determines the quality of life in a nation, a state or a locality? 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 Phillips 25
Total Tax Burden As % of GDP, 2004Google Forbes overall tax burdenTotal Tax Burden As % of GDP, 2004Google Forbes overall tax burden
Country Total Tax burden
Sweden 50.7%
France 43.7
UK 36.1
Germany 34.8
Canada 33.0
Switzerland 29.4
USA 25.5
Mexico 18.5
Llad Phillips 26
Public Vs. Private GoodsPublic Vs. Private Goods
Labor for Public Goods
Labor for
Private Goods
Contraint
Labor, Private
Private
Goods
Production Function
Llad Phillips 27
L, public
Output, Public
L, Private
Output, PrivateProduction Possibility Frontier
Llad Phillips 28
L, public
Output, Public
L, Private
Output, PrivateProduction Possibility Frontier
Llad Phillips 29
Private
Public
Sweden
UK
USMexico
Canada
Llad Phillips 30
Production Possibility FrontierProduction Possibility FrontierPRIVATE
PUBLIC
Inefficient
Does the global economyCause a bias towards Private instead of publicGoods and services?
Llad Phillips 31
Production Possibility FrontierProduction Possibility Frontier
Public Goods:Defense
Public Goods: Health
Inefficient
Does being the world’sPoliceman cause a bias Away from other public Goods and services?
Llad Phillips 32
Expenditures Per PupilExpenditures Per PupilFiscalFiscal
YearYear
70-7170-71 80-8180-81 90-9190-91 00-0100-01 03-0403-04 05-0605-06
CACA
RankRank
1414 1919 2828 2525 2828 3535
NominalNominal
$, CA$, CA
902902 24382438 45954595 69866986 76737673 86078607
USUS 842842 23072307 49024902 73737373 83108310 95769576
Llad Phillips 33
Production Possibility FrontierProduction Possibility Frontier
Public Goods:Prison Operation
Public Goods: education
Inefficient
Which would you rather do (1) keep the 30% ofstate prisoners who are pot-heads locked up, or(2) educate your kids?
Llad Phillips 34
US PoliticsUS Politics ““It’s the economy stupid!”It’s the economy stupid!” Issues in 2008, 2009, 2010, & 2011Issues in 2008, 2009, 2010, & 2011
Human capital and educationHuman capital and education The family and social conservativesThe family and social conservatives
I will argue that the issues of family and education are connected
Llad Phillips 35
7.2% 29.6%
Llad Phillips 36
33.8%
5.8%
7.2/5.8 ~ 26% rise
Llad Phillips 37
The Economy and CrimeThe 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 Phillips 39
Llad Phillips 40
Llad Phillips 41
Where is the economy headed?Survey of Professional Forecastershttp://www.phil.frb.org/files/spf/survq407.html
Where is the economy headed?Survey of Professional Forecastershttp://www.phil.frb.org/files/spf/survq407.html
Llad Phillips 42
The forecasters can be wrong!The forecasters can be wrong!
A day late and a dollar short
Llad Phillips 43
California Forecasts & Record: Umemployment rate: CA Dept. of FinanceCalifornia Forecasts & Record: Umemployment rate: CA Dept. of Finance
YearYear 20042004 20052005 20062006 20072007 20082008 20092009 20102010
CACA 6.2%6.2% 5.4%5.4% 4.9%4.9% 5.3%5.3% 5.7%5.7% 5.6%5.6% 5.5%5.5%
USUS 5.5%5.5% 5.1%5.1% 4.6%4.6% 4.6%4.6% 5.0%5.0% 5.0%5.0% 4.8%4.8%
Llad Phillips 44
Jobs and CrimeJobs and Crime
Llad Phillips 45
Questions About CrimeQuestions About Crime
Does the Business Cycle Affect Crime Does the Business Cycle Affect Crime Rates?Rates?
Does an Individual’s Life Cycle Affect Does an Individual’s Life Cycle Affect Crime Rates?Crime Rates?
Why do some people live socially Why do some people live socially unproductive lives?unproductive lives?
Llad Phillips 46
Two Points About Economic Conditions and CrimeTwo Points About Economic Conditions and Crime Relationship of Crime to the Business CycleRelationship of Crime to the Business Cycle
Short RunShort Run: Business Cycle: Business Cycle Is Phil Cook wrong?Is Phil Cook wrong? California: the misery index and crimeCalifornia: the misery index and crime
misery index = unemployment rate + inflation ratemisery index = unemployment rate + inflation rate
Relationship of Crime to the Life CycleRelationship of Crime to the Life Cycle Long RunLong Run Investment in EducationInvestment in Education Role of the FamilyRole of the Family
Llad Phillips 47
Why do people work in labor market?Why do people work in labor market?
Tastes? Assume everybody has the same tastes! Human capital: earning power
Education Work experience Health
Llad Phillips 48
An Individual’s Life Cycle for a Socially Productive LifeAn Individual’s Life Cycle for a Socially Productive Life Learning over the life cycleLearning over the life cycle Accumulating earning power or human Accumulating earning power or human
capitalcapital Earnings depend uponEarnings depend upon
abilityability knowledgeknowledge work experiencework experience healthhealth
Llad Phillips 49
Productive Life Cycle
Social Institution
Family - PreSchool - School - College - Job - Retirement
Function
Learning: Accumulating Human Capital - Earning - Spending
Age Line
0 4 6 18 23 65
Llad Phillips 50
Accumulating Human Capital
Inflow OutflowStock
Llad Phillips 51
Accumulating Human Capital
StockInflow +
-
OutflowNet Inflow
Llad Phillips 52
Accumulating Human Capital
HumanCapital
Learning +
-
DepreciationInvestment
Llad Phillips 53
Allocation of Your Time
Human Capital
Build Capitalby Learning
Use Capitalfor Earning
Llad Phillips 54
Time Endowment
24 hours
Llad Phillips 55
24 hours0 hoursLeisure(learning)
Llad Phillips 56
Allocation of Your Time
Human Capital
Build Capitalby Learning
Use Capitalfor Earning
Llad Phillips 57
24 hours0 hoursLeisure(learning)
Earnings
$480 Opportunities for trading leisurefor earnings (income) at a rate,$20 per hour, determined by yourstock of human capital
$ 0
Llad Phillips 58
Salaries by Education Level, CAFull Time* WorkersSalaries by Education Level, CAFull Time* WorkersEducation Salary WageNo HS Dipl. $26,115 $13.06 HS Dipl. $27,326 $13.69Bachelor’s $44,426 $26.39Master’s $52,787 $26.97Doctorate $59,348 $29.67Professional $77,877 $38.94
*Full Time: >35 hrs/wk, >48 wks/yr.; Source: LA Times, 1-10-93
24 hours0 hoursLeisure(learning)
Earnings
$480
$ 0
$240
dropout
college grad
Llad Phillips 60
Economists Assume You Can make ComparisonsEconomists Assume You Can make Comparisons For example: you can compare a high level For example: you can compare a high level
of your income and a low level of your of your income and a low level of your leisure leisure withwith a low level of your income and a low level of your income and a high level of your leisurea high level of your leisure
24 hours0 hoursLeisure(learning)
Earnings
$480
$ 0
Iso-Preference Curves:You value all points on a curve equally
high
low value
high value
24 hours0 hoursLeisure(learning)
Earnings
$480
$ 0
high
low value
high value
Optimum
15 hoursof leisure
$180for 9 hrsof work
24 hours0 hoursLeisure(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 hoursLeisure(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 Phillips 65
Participation in the Labor Force:Willing to look for workParticipation in the Labor Force:Willing to look for work If your market wage exceeds your If your market wage exceeds your
reservation wagereservation wage college grad, @$20/hr, participatescollege grad, @$20/hr, participates the junior high dropout, @ $4/hr, does notthe junior high dropout, @ $4/hr, does not
We assumed the college grad and the We assumed the college grad and the dropout both have the same values for dropout both have the same values for income and leisureincome and leisure
Only their learning histories differ Only their learning histories differ
24 hours0 hoursLeisure(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 Phillips 67
Productive Life Cycle
Social Institution
Family - PreSchool - School - College - Job - Retirement
Function
Learning: Accumulating Human Capital - Earning - Spending
Age Line
0 4 6 18 23 65
Llad Phillips 68
SummarySummary
Your economic status affects your probable Your economic status affects your probable behavior: work or crimebehavior: work or crime
Earning power affects your probable Earning power affects your probable behaviorbehavior
When you are a young teen you need a When you are a young teen you need a parent or role model to motivate you to stay parent or role model to motivate you to stay in school and keep learningin school and keep learning
Llad Phillips 69
The EndThe End
Llad Phillips 70
Llad Phillips 71
Number of Responses Versus Score for Homicide
1 30 0 0 0 1 2 1
15
90
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Score
Nu
mb
er2003
Llad Phillips 72
Class Survey 2003Class Survey 2003
Scoring Ten BehaviorsScoring Ten Behaviors 113 Responses113 Responses No two are the sameNo two are the same Two most similar responsesTwo most similar responses Two most different responsesTwo most different responses
Llad Phillips 73
Similar ScoringsSimilar ScoringsHomicide 10 10Poisoning 10 10Rape 10 10Arson 7 8Sell Heroin 7 5Auto Theft 4 7Embezzle 4 4Prostitute 5 2Possess Pot 3 1Sniff Glue 0 0
Llad Phillips 74
Different ScoringsDifferent ScoringsHomicide 10 1Poisoning 10 5Rape 10 2Arson 10 4Sell Heroin 8 3Auto Theft 9 6Embezzle 7 7Prostitute 7 8Possess Pot 5 9Sniff Glue 8 10
Llad Phillips 75
Number of Responses Versus Score for Homicide
1 30 0 0 0 1 2 1
15
90
0
10
20
30
40
50
60
70
80
90
100
0 1 2 3 4 5 6 7 8 9 10
Score
Nu
mb
er2003
Llad Phillips 76
Dispersion Versus Median Score, 2003
0
0.5
1
1.5
2
2.5
0 2 4 6 8 10 12
Median Score
Dis
per
sio
n
Llad Phillips 77
Econ 160 Fall 99 Class Ratings .
Sniff Glue
MarijuanaProstitute
Embezzlement
Sell HeroinAuto Theft
ArsonPoisoning
RapeHomicide
0.0
2.0
4.0
6.0
8.0
10.0
12.0
0.00 2.00 4.00 6.00 8.00 10.00 12.00
Standard Deviation: Dispersion
Mea
n R
atin
g
Llad Phillips 78
SERIOUSNESS SURVEY
RATE THE SERIOUSNESS OF EACH OF THE FOLLOWING BEHAVIORS ON A SCALE FROM ZERO( LEAST SERIOUS) TO TEN( MOST SERIOUS):
MEDIAN ‘03 ‘051. 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 Phillips 79
Misery Index, California 1952-2003
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
1950 1960 1970 1980 1990 2000 2010
year
Rat
e
unemployment rate
inflation rate
misery index
Llad Phillips 80
California Misery Index and Crime Index, 1952-2002
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
1950 1960 1970 1980 1990 2000 2010
Year
Ra
te
CA Misery Index
CA Crime Index Per 1000
California: Crime Index Versus Misery Index .
1970
1992
1975
1998
1980
1952
0
5
10
15
20
25
30
35
40
0.00 5.00 10.00 15.00 20.00 25.00
Misery Index
Cri
me I
nd
ex
Llad Phillips 82
How best to Learn in a Lecture classThat does notHave a Section?
We RecommendGoing to class.The questionsOn the examsAre from topicsDiscussed inClass.
How much math does 160 require?
1.Descriptive Graphs2. AnalyticalGraphs (exams)3. Notation e.gOF=f(CR,SE,SV)
Llad Phillips 83
Homicide, W 06, 61 Respondents
0 0 0 0 1 0 0 07
53
0102030405060
1 2 3 4 5 6 7 8 9 10
Seriousness
Fre
qu
ency
Mode = 10, largest number of responsesMedian = 10, score of 31st person
Llad Phillips 84
Homicide, W 05, 98 Respondents
1 2 0 1 0 0 1 3
16
74
0
20
40
60
80
1 2 3 4 5 6 7 8 9 10
Seriousness
Fre
qu
ency
Mode = 10, largest number of responsesMedian = 10, score of 49th person
Llad Phillips 85
Number of Responses Versus Score for Homicide 2004
0
10
20
30
40
50
60
70
80
0 1 2 3 4 5 6 7 8 9 10
Score
Res
po
nse
s
1 1 3
14
73
Llad Phillips 86
Rape, W 05, 98 Respondents
0 0 1 0 1 4 7
19
39
27
0
10
20
30
40
50
1 2 3 4 5 6 7 8 9 10
Seriousness
Fre
qu
en
cy
Mode = 9Median = 9
Llad Phillips 87
Possession of Marijuana, W 06, 61 Respondents
33
96
25
2 2 1 0 10
10
20
30
40
1 2 3 4 5 6 7 8 9 10
Seriousness
Fre
qu
en
cy
Mode = 1Median = 1
Llad Phillips 88
0 1 2 3 4 5 6 7 8 9 10
23
31
27
10
7
4 4 5
2
0 00
5
10
15
20
25
30
35
Fre
qu
enc
y
Score
Number of Responses Vs. Possession of Pot Score ‘02
Llad Phillips 89
Disagreement Versus Seriousness, 02
Arson
Selling Heroin
Auto Theft
Embezzle
Mass Poisoning
Rape
Homicide
Prostitute
Possess Pot
Sniff Glue
0
0.5
1
1.5
2
2.5
3
0 2 4 6 8 10 12
Score
Dis
per
sio
n (
Sta
nd
ard
Dev
iati
on
)
Homicide2004
Seriousness Scores, Spring 2001 .
Auto Theft
Arson
Selling Heroin
PoisoningMarijuana
Prostitute
Sniffing Glue
Rape
Homicide
0.00
0.50
1.00
1.50
2.00
2.50
3.00
0.0 2.0 4.0 6.0 8.0 10.0 12.0
Average
Embezzlement
Sta
ndar
d D
evia
tion
or
Dis
pers
ion
Llad Phillips 91
John Tukey: Box Plot for Pot ‘09John Tukey: Box Plot for Pot ‘09
Smallest = 0
Q1 = 1
Median = 1
Q3 = 3
Largest = 8
IQR = 2
Outliers: 8, 8, 8, 7,
Llad Phillips 92
