Skip to 0 minutes and 16 secondsWelcome to Week 5. So far, we saw how the certainty and severity of punishment can influence the decision to commit a crime or not. But it’s clear that there are other factors that can also influence a person’s decision to commit a crime, such as his family background and schooling experience. The baseline model we saw earlier did not take into account these other effects explicitly, but the model can be easily extended to include them in it. This week, we will first examine how education and jobs can influence crime. Recall that the economic model predicts that a criminal chooses to commit a crime because he can gain more by committing a crime than not committing a crime.

Skip to 1 minute and 6 secondsThen, having more and better education and working at a high-paying, legitimate job should lower the probability of committing a crime, because the gains from staying away from crime and continuing to work at the high-paying job should be greater than the potential gains from crime. This prediction is supported by many empirical studies that show that crime is closely related to education and labor market conditions. We will examine these studies, with a special emphasis on what they did to try to recover a causal relationship between education, jobs, and crime. We will also look at other studies that investigate how crime may be influenced by other factors such as drug and alcohol consumption, peer groups, and private protection.

Skip to 1 minute and 58 secondsMany of them use empirical strategies we encountered already: such as linear regression with fixed effects, difference-in-differences, and regression discontinuity analysis. As we will see, there is not a single empirical method that is better than all the others. The choice of empirical method to use depends on a number of factors, and it is the researcher’s responsibility to choose to right method, given the research question he is interested in. As we go through more examples of empirical studies on economics of crime, please pay a close attention to the choice of empirical strategy used by the authors and think about why the strategy is appropriate for the research question they are trying to answer.

Skip to 2 minutes and 47 secondsPerhaps you can think about how you can do an even better job of answering the same question by using a different empirical strategy.

Welcome to Week 5

In Weeks 3 and 4, we focused on police and prison as two main crime-control policy tools.

But there are many other decisions made by individuals and government that can also influence crime. What are some examples?

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Economics of Crime

Hanyang University

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