Behavioural economics and crime

This is an interesting article. Although I have to say that I am also interested in what the ‘ethics’ section of the research proposal on alcoholism referred to therein looked like…

21 replies on “Behavioural economics and crime”

I think there are big differences between countries in what is considered ethical. I have certainly seen US research which I think would struggle to get through an ethics board here. I am on one – but speaking in a personal capacity. The normal rule of thumb is that no-one is harmed in an experiment so that would probably rule out shocking the alcoholics.
I am amazed at how audit studies [sending fake CVs out to see whether call-back vary with race or sex] are widely considered ethical in the US when it clearly involves wasting the time of others without their consent.
As I understand it, some bio-medical research is being shifted to developing countries where ethical standards are lower. For example, there is a randomized control trial on breastfeeding in Belorus which would probably not be allowed in the West.

Prisons are a booming industry in USA. Most irrational actors are suffering from dietary deficiencies and mental illnesses and can be cured, but then, that would not enable more prisons to be built.

The USA has about the largest prison population in the world. It is even worse per head of pop. It delights many there that 25% of african and mixed african descent males are and likely will be felons. Felons are not allowed to vote.

If Irish politicians could not even use their doctored electoral machines it is probably not an idea to try to spin up a similar industry in Ireland. In other countries, non-public service personnel are used to keep prisons. They can be forced to labour too! And underpaid. Why not farm them for their organs and sell to the highest bidder? Now there is economics in action.

I imagine 100,000 Irish have special reason to think of US prisons as they supplied blood products to people in need in Ireland and elsewhere. Hepatitis C anyone? Prisons are avoidable, but only where people care for one another. I feel Ireland lost this in the Tiger years.

But somehow I feel that prisons will sart to overflow in Ireland soon. Luckily, there will be lots of suitable areas in Nama so the cost can be as high as possible. It’s so good for the economy, ya know.

Frank seems to forget that the policy cannot prioritise as they see fit, and surely not in the US. They have to take the public and political response into account too. The Red gang may be the most serious problem in an objective sense of the word, but the Yellow gang is pestering little old ladies who call in radio shows.

“LAW enforcement policy in the United States rests implicitly on the “rational actor” model of traditional economics, which holds that people take only those actions whose benefits exceed their costs.”

For “rational action” to exist as a limiting factor on social behaviour the social contract must be transparent and just.

If the contract becomes opaque and lacking in justice the rational response may be to ignore the contract.

Just mulling on this, it strikes me that the distribution of expected rewards for any individual act of crime by the “long-term repeat offenders, a majority of whom are eventually caught” described in the article may be close to normal, but with a hump in the tail on each side reflecting the chances of making it big on one side, and being jailed or taken out in a drive-by on the other.

Seems to me that I have often heard of well very educated people getting caught out by behaving as if similar distributions of returns in equity markets are actually normal. So, perhaps we shouldn’t be too sniffy about the rationality of people who are mostly at the other end of the social scale falling into the same trap.

I spoke to him on the phone a while back

http://www.mortgagebrokers.ie/blog/index.php/2009/08/07/a-phone-call-with-bob-frank-author-of-the-economic-naturalist/

I think that more research could be done on how the opportunity cost of crime changes in the face of addiction/mental health issues/etc. I did some interviews recently with street addicts and they felt jail was good… ‘for a rest’! they go there to get some down time from the streets?! you couldn’t make it up. (its on youtube as ‘the junkie diaries’).

obviously one thing that many people don’t want to consider that would go a long way toward reducing many crimes is that of legalization of the problem – prohibition essentially creates many of the criminals that we then have to arrest/detain etc. alcohol prohibition created Al Capone, and we see the same thing today with soft/hard drugs, the prohibition actually creates the market with margins attractive enough to warrant the use of firearms in the trade, sadly we have historic proof of this that nobody wants to pay attention to in policy – seriously, how many machine gun toting bootleggers are there today? End prohibition and you end much of the problem, it doesn’t mean you privatise it obviously, the state already distributes methadone, why shouldn’t they sell heroin to people who are going to take it anyway and at least rid society of drug czars in the process?

More behaviorist than behavioral – . The real ‘irrationality’ is continuing with the abysmal failure of prohibition on one side of the drugs/chemicals equation. Humans ‘do’ chemicals – from the vast output of pharmaceutical firms and chemicals as used or abused in health services – to alcohol and others including tea and coffee – and then to those on the outside – opium, heroin, cannabis etc where the ‘market’ is the domain of socially constructed criminality – and note the increase in heroin usage across Ireland.
Anyone here have a good estimate of the ‘economic size’ of the ‘illegal drug’ market in Ireland – or globally?

http://blog.mpp.org/uncategorized/netherlands-to-close-prisons-not-enough-criminals/05262009/

Yes, I know the thread is not about prisons!

Gaming criminals aalready goes on, ask any mid-ranking coppers that you may know. Resources have always been inadequate for “proper policing”. Revenue already announces that audits will concentrate on certain types of tax criminals, without using that language. Each attempt at gaming is a tacit admission that the system is designed to fail. Shibboleths are about to be examined as banks fall over and currencies run. Every new law and enforcement procedure is a restriction of liberty of us all. Just to pander to voters who ring in to radio stations but also to distract from the massive crony capitalism distorting the economy.

@Pat
A Scopus search on “corruption” in the subject area of economics returns 1082 papers. Many of these are on the macroeconomic impacts, but just as many are on the microeconomics. A similar search on “crime” returns 1654 papers.

I could find only two papers on Ireland:
http://www.esr.ie/Vol34_3OSullivan.pdf
http://www.springerlink.com/content/n376l2k40726867t/

The logical conclusion is that Ireland is mercifully free of crime and corruption.

Richard Tol
Thank you. I am reassured! New Zealand has just imprisoned an MP. We Irish are morally superior… or just cute hoors who do not care that we will have new taxes just to pay for past corruption. How can voters return those who are known to be corrupt and expect not to pay for it?

The common estimate of drug trade size, illegal, is second or third in terms of monetary worth along with arms and coffee as international trade go. I hold that it is make work and allows political division and suppression of the poorer classes as was the case with alcohol.

Prohibition is self fulfilling and allows much political capital to be amassed as enforcement means action and jobs etc. By being prohibited, the cost and profit increase so as to create markets hence the infamous here try this it is free approach to those in the playgrounds of our schools.

Abolition of prohibition would impact alcohol sales and suggests that those drugs allowed would be taxed and of the best quality. The East India Company forced opium onto China and developed opium production in India. The CIA has been involved for years, demonstrated by the Iran Contra affair and other less reliable reports. Some say Bush jr and Bill Clinton were accomplices operating in Arkansas, out of Mena airfield. The profits are so vast the money laundering provisions mean that banks are bought or set up. BCCI for example.
Gee, banks engaging in dishonest dealings …. ya don’t think … ?

I don’t know why I know so much about drugs, eh Fachtna?

I remember an editorial in the Sunday Independent in late August 1996, that castigated an unknown tax official in CAB for failing to do his duty. It seems that the police can corruptly leak information to the newspapers when it serves their purpose? I seem to know more about that issue than the newspaper.

Anyone interested in hearing it?

So which of our political institutions are honest?

Gaming is the unseen hand of the scotsman whose name escapes me but is linked with free enterprise. Gaming is fashion and envy is caused by it. It motivates people to try harder and to save, but also to borrow when that is available. Because we know borrowing is dangerous, as bad as alcoholism, we regulate it. Except when we don’t. Then, it gets out of hand and we have upheaval. So what gaming would we apply to trade and above all, to borrowing?

Surprised that Professor Frank would go down the route of bashing ‘homo economicus’, given that:
(1) he goes on to describe criminals as rational people with very high discount rates
(2) the ‘revolutionary idea’ is really just changing the p in an equation along the lines of E(U)= L – p.J
where E(U) is expected utility, ‘L’ is the likely loot, ‘p’ is the (perceived) probability of being caught and ‘J’ is the jail time if caught.

Varying p while holding J constant (as opposed to the opposite) is hardly revolutionary, or have I read this all wrong?

Comments are closed.