Conferences.

• Position: National Bureau of Economic Research - Conference news

Inter-American Seminar on Economics

The NBER and the Universidad Torcuato di Tella (UTDT) in Buenos Aires, Argentina jointly sponsored this year's Inter-American Seminar on Economics on "Crime, Institutions, and Policies." The conference took place in Buenos Aires on November 29 and 30. The organizers were: Sebastian Edwards, University of California, Los Angeles and NBER; Rafael Di Tella, Harvard Business School and NBER; and Ernesto Schargrodsky, UTDT. They chose these papers for discussion:

Naci Mocan, Louisiana State University and NBER, and Kaj Gittings, Cornell University, "The Impact of Incentives on Human Behavior: Can We Make it Disappear? The Case of the Death Penalty"

Comments: Lucia Quesada, UTDT

Joao M. P. De Mello, Catholic University of Rio de Janeiro, and Alexandre Schneider, Secretary of Education for the city of Sao Paulo, "Age Structure Explaining a Large Shift in Homicides: the Case of the State of Sao Paulo"

Comments: Lucas Llach, UTDT

Brendan O'Flaherty and Rajiv Sethi, Columbia University, "Peaceable Kingdoms and War Zones: Preemption, Ballistics, and Murder in Newark"

Comments: Guitlermo Cruces,

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Ana Maria Ibanez and Andres Moya, Universidad de los Andes, "Do Conflicts Create Poverty Traps? Asset Losses and Recovery for Displaced Households in Colombia"

Comments: Martin Gonzalez Rozada, UTDT

Radha Iyengar, Harvard University and NBER, "Does the Certainty of Arrest Reduce Domestic Violence? Evidence from Mandatory and Recommended Arrest Laws"

Comments: Rafael Di Tella

Ernesto Schargrodsky and Rafael Di Tella, "Electronic Monitoring of Inmates"

Comments: Nestor Gandelman, Universidad ORT Uruguay

Angela K. Dills, Mercer University; Garret Summers, Harvard University; and Jeffrey A. Miron, Harvard University and NBER, "What Do Economists Know about Crime?"

Comments: Sebastian Edwards

Carlos Medina and Leonardo Morales, Banco de la Republica de Colombia; Alejandro Gaviria, Universidad de los Andes; and Jairo Nunez, Centro Nacional de Consultoria, "The Cost of Avoiding Crime: the Case of Bogota"

Comments: Alfredo Canavese, UTDT

Mirko Draca, London School of Economics; Stephen Machin, London School of Economics; and Robert Witt, University of Surrey, "Panic on the Streets of London: Police, Crime, and the July 2005 Terror Attacks"

Comments: Catherine Rodriguez, Universidad de los Andes

Maria Laura Alzua, IERAL-Fundacion Mediterranea; Catherine Rodriguez; and Edgar Villa, Universidad del Externado, "The Effect of Education on In-jail Conflict"

Comments: Andres Borenstein, British Embassy Buenos Aires

Sheng-Wen Chang, National Chengchi University; N. Edward Coulson, Penn State University; and Ping Wang, Washington University in St. Louis and NBER, "A Quantitative Study of Optimal Drug Policy in Low Income Neighborhoods"

Comments: Federico Weinschelbaum, UdeSA

Rodrigo R. Soares, University of Maryland and NBER, and Joana Naritomi, World Bank, "Understanding High Crime Rates in Latin America: the Role of Social and Policy Factors"

Comments: Alejandro Gaviria, Universidad de los Andes

Although decades of empirical research has demonstrated that criminal behavior responds to incentives, non-economists frequently express the belief that human beings are not rational enough to make calculated decisions about the costs and benefits of engaging in crime--therefore, they a priori draw the conclusion that criminal activity cannot be altered by incentives. However, scientific research should not be driven by personal beliefs. Whether economic conditions matter, or deterrence measures--such as police, arrests, prison deaths, executions, and commutations--provide signals to people is an empirical question, which should be guided by a solid theoretical framework. Mocan and Gittings examine the relationship between state homicide rates and death-penalty related outcomes (executions, commutations, and removals from death row). They alter econometric models in a number of directions to make the deterrence results disappear by deliberately deviating from the theoretically consistent measurement of the risk variables in a variety of ways. They further investigate the sensitivity of the results to changes in the estimation sample (for example by removing high executing states from the sample) and weighting. Their basic results are insensitive to these and a variety of other specification tests performed in the paper. The results are often strong enough to hold up even under theoretically meaningless measurements of the risk variables. The findings are robust, providing evidence that people indeed react to incentives induced by capital punishment.

After reaching a historic peak by the end of the 1990s, homicides in large cities in the state of Sao Paulo dropped sharply. Several explanations have been advanced, most prominently improvements in policing, adoption of policies such as dry laws, and increased incarceration. DeMello and his co-authors show that demographic changes play a large role in explaining the dynamics of homicide. More specifically, they present evidence of a strong co-movement between the proportion of males in the 15-25 age bracket and homicides at the statewide and at city levels, and argue that the relationship is causal. They estimate that a 1 percent increase in the proportion of 15-to-24-year-old males causes a 4.5 percent increase in homicides.

Between 2000 and 2006 the murder rate in Newark doubled while the national rate remained essentially constant. Newark now has eight times as many murders per capita as the nation as a whole. Furthermore, the increase in murders came about through an increase in lethality: total gun discharges rose much more slowly than the likelihood of death per shooting. In order to explain these trends, O'Haherty and Sethi develop a theoretical model of murder in which preemptive killing and weapon choice play a central role. Strategic complementarity amplifies changes in fundamentals, so areas with high murder rates (war zones) respond much more strongly to changes in fundamentals than those with low murder rates (peaceable kingdoms). In Newark, the changes in fundamentals that set off the spiral were a collapsing arrest rate (and probably a falling conviction rate), a reduction in prisoners, and a shrinking police force.

Internal conflicts entail large asset losses for segments of the civil population. Asset losses may compromise future welfare of households, leaving a legacy of structural poverty that is difficult to overcome. Ibanez and Moya analyze how asset losses occur during internal conflicts and the process of asset recovery after the shock. In order to achieve this objective, they concentrate on a particularly vulnerable group of victims of war: the displaced population in Colombia. They adopt quantitative and qualitative approaches to achieve this objective by: providing a detailed description of losses stemming from forced displacement; analyzing qualitative evidence to understand asset recovery processes for the displaced population; and estimating OLS, Instrumental Variable, and quartile regressions to identify the determinants of asset recovery. Their results indicate that recuperating or accumulating new assets is a rare event: only 25 percent of households are able to recuperate assets, and asset ownership seems still insufficient to overcome poverty. In addition, displaced households do not catch up as settlement in destination sites consolidates so, unless a positive intervention is implemented, displaced households will be locked in a low income trajectory and leaping forward to a high return asset level is highly unlikely.

Domestic violence remains a major public policy concern despite two decades of policy intervention. To eliminate police inaction in response to domestic violence, many states have passed mandatory arrest laws, which require the police to arrest abusers when a domestic violence incident is reported. These laws were justified by a randomized experiment in Minnesota that found that arrests reduced future violence. This experiment was conducted during a time period when arrest was optional. Using the FBI Supplementary Homicide Reports, Iyengar finds that mandatory arrest laws actually increased intimate partner homicides. She hypothesizes that this increase in homicides is attributable to decreased reporting. She investigates the validity of this reporting hypothesis by examining the effect of mandatory arrest laws on family homicides where the victim is less often responsible for reporting. For family homicides, mandatory arrest laws appear to reduce the number of homicides. This study therefore provides evidence that these laws may have perverse effects on intimate partner violence, harming the very people they seek to help.

Schargrodsky and Di Tella study the arrest rates of individuals released from prison as opposed to those who were formerly being electronically monitored. They exploit the fact that electronic monitoring in Argentina is assigned to prisoners by judges with highly different preferences: some regularly assign prisoners to electronic monitoring while others never do so. Importantly, electronic...