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Essays on the economics of crime

Long, Iain William (2012) Essays on the economics of crime. PhD thesis, The London School of Economics and Political Science.

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Abstract

I present three essays on the economics of crime. The first considers an activity associated with 55% of all criminal offences in the UK: binge drinking. One group inextricably linked with such behaviour is the sports team. Members regularly engage in post-match drinking, where the team's reputation is at stake. Teams often apply peer pressure (the threat of punishment for refusal to compete) to ensure each member gets involved. Chapter 1 presents a simple model of competitive drinking, and evaluates the amount of peer pressure a team needs to apply when multiple equilibria exist. The thesis then turns attention towards criminal organisations. Chapter 2 discusses the use of initiation by protection rackets. Such rituals are widely used, and serve several purposes. Firstly, they allow initiates' skills to be assessed. Secondly, they act as an incentive to invest in skills. Thirdly, they signal to the racket's customers. The chapter derives conditions on the underlying distribution of abilities such that a racket can adjust initiation difficulty to improve its reputation. It then discusses these conditions in light of "key player" policies, suggesting they may be more effective than previously thought. Chapter 3 evaluates the impact of a variety of anti-crime policies on how a criminal gang recruits. Gangs counteract policy effects by adjusting the wage they offer and the intensity of violence they require their members to inflict. This can lead to policies backfiring; increasing the social cost of the gang. A policy which reduces the youths' incentive to join a gang leaves only hardened criminals as recruits. If gang size and violence are weak revenue complements, this causes the gang to substitute towards more violence. Policies are therefore most effective when they not only reduce the incentive to join the gang, but also increase youths' sensitivity towards inflicting violence.

Item Type: Thesis (PhD)
Additional Information: © 2012 Iain William Long
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HV Social pathology. Social and public welfare. Criminology
Sets: Departments > Economics
Collections > Economists Online
Supervisor: Felli, Leonardo and Young, Alwyn
URI: http://etheses.lse.ac.uk/id/eprint/416

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