New Economics Papers
on Law and Economics
Issue of 2009‒11‒07
five papers chosen by
Jeong-Joon Lee, Towson University

  1. Reverse Charging Purchases to Intra-Transportation Means in the Context of New Tax Regulations By Ecobici Nicolae; Merita Busan Gabriela
  2. More Tickets, Fewer Accidents: How Cash-Strapped Towns Make for Safer Roads By Michael D. Makowsky; Thomas Stratmann
  3. Thieves, Thugs, and Neighborhood Poverty By Bjerk, David
  4. Deterrence in Competition Law By Paolo Buccirossi; Lorenzo Ciari; Tomaso Duso; Giancarlo Spagnolo; Cristiana Vitale
  5. A contribution to the empirics of crime By Andrea, Borlizzi

  1. By: Ecobici Nicolae; Merita Busan Gabriela (Constantin Brancusi University of Targu Jiu, Faclty of Economics, Romania)
    Abstract: New tax rules with effect from 1 May 2009 with a series of changes on the tax deductibility of the value added acquisitions related to transport and fuel use. The measure is very obvious nature of politics in order to bring the state budget amounts as required under the current government crisis in the financial world. The book focuses on not commenting policy modifications as required on the implications that they bring in on the accounting chargeback. Therefore, in the paper we will address the resolution of these legal provisions in the economic accounts.
    Keywords: tax rules, accounts, financial crisis, politics, government
    JEL: K20 M41 D84 H21 H23
    Date: 2009–05
  2. By: Michael D. Makowsky (Department of Economics, Towson University); Thomas Stratmann (Department of Economics, George Mason University)
    Abstract: Traffic accidents are one of the leading causes of injury and death in the U.S. The role of traffic law enforcement in the reduction of accidents has been studied by relatively few papers and with mixed results that may be due to a simultaneity problem. Traffic law enforcement may reduce accidents, but police are also likely to be stricter in accident- prone areas. We use municipal budgetary shortfalls as an instrumental variable to identify the effect of traffic citations on traffic safety and show that budgetary shortfalls lead to more frequent issuance of tickets to drivers. Using a panel of municipalities in Massachusetts, we show that increases in the number of tickets written reduce motor vehicle accidents and accident related injuries. The findings show that failure to control for endogeneity results in a significant underestimation of the positive impact of law enforcement on traffic safety.
    Keywords: traffic accidents, safety, law enforcement, simultaneity.
    JEL: K32 K42 H71 C33
    Date: 2009–06
  3. By: Bjerk, David (Claremont McKenna College)
    Abstract: This paper develops a model of crime analyzing how such behavior is associated with individual and neighborhood poverty. The model shows that even under relatively minimal assumptions, a connection between individual poverty and both property and violent crimes will arise, and moreover, "neighborhood" effects can develop, but will differ substantially in nature across crime types. A key implication is that greater economic segregation in a city should have no effect or a negative effect on property crime, but a positive effect on violent crime. Using IV methods, I show this implication to be consistent with the empirical evidence.
    Keywords: poverty, crime, neighborhood effects, segregation, instrumental variables, public housing
    JEL: K42 I38
    Date: 2009–10
  4. By: Paolo Buccirossi; Lorenzo Ciari; Tomaso Duso; Giancarlo Spagnolo; Cristiana Vitale
    Abstract: This paper provides a comprehensive discussion of the deterrence properties of a competition policy regime. On the basis of the economic theory of law enforcement we identify several factors that are likely to affect its degree of deterrence: 1) sanctions and damages; 2) financial and human resources; 3) powers during the investigation; 4) quality of the law; 5) independence and 6) separation of power. We then discuss how to measure deterrence. We review the literature that uses surveys to solicit direct information on changes in the behavior of firms due to the threats posed by the enforcement of antitrust rules, and the literature based on the analysis of hard data. We finally argue that the most challenging task, both theoretically and empirically, is how to distinguish between “good” deterrence and “bad” deterrence. <br> <br> <i>ZUSAMMENFASSUNG - (Abschreckung im Wettbewerbsrecht) <br>Dieser Beitrag bietet eine umfassende Diskussion über die Abschreckungseigenschaften eines wettbewerbspolitischen Systems. Auf der Grundlage der ökonomischen Theorie der Rechtsdurchsetzung werden mehrere Faktoren identifizier, welche den Abschreckungsgrad des Systems am ehesten beeinflussen können. Diese sind: 1) Sanktionen und Schadensersatzforderungen, 2) finanzielle Ressourcen und Personal der Wettbewerbsbehörde, 3) die Befugnisse der wettbewerbspolitischen Autorität im Rahmen der Untersuchung, 4) die Qualität des Rechtsrahmens, 5) die Unabhängigkeit der Behörde und 6) die Gewaltenteilung. Anschließend wird diskutiert, wie man den Abschreckungsgrad eines wettbewerbspolitischen Systems empirisch messen kann. Zuerst wird die Literatur besprochen, die auf Befragungen beruht. Die Befragungen sollten Aufschluss darüber geben, wie sich das Unternehmensverhalten angesichts der Durchsetzung von wettbewerbspolitischen Maßnahmen ändert. Dem gegenüber wird die Literatur dargestellt, die "harte" Daten nutzt. Schließlich wird argumentiert, dass die anspruchsvollste Aufgabe sowohl theoretisch als auch empirisch darin bestehen wird, zwischen "guter" und "schlechter" Abschreckung durch Wettbewerbspolitik zu unterscheiden.<i>
    Keywords: Competition Policy, Law Enforcement, Deterrence
    JEL: K21 K42 L4
    Date: 2009–10
  5. By: Andrea, Borlizzi
    Abstract: In this thesis I consider two questions. First, I examine the extent to which economic versus sociological theories explain the variation in property and violent crime rates separately. Second, I consider how the relative economic position of a community among neighboring areas may be associated with crime. Both economic and sociological theories suggest that higher inequality may be associated with crime. Economic theories imply that inequality may be positively correlated with crime through its effect on the differential returns from criminal activity versus legitimate pursuits. This suggests that there would be no relationship between crime and inequality, if the benefits and costs of crime participation are controlled. However, sociological theories of crime imply that inequality may have effects on crime through other channels such as lack of social capital, lack of upward mobility, or social disorganization. The empirical evidence on the crime-inequality relationship generally shows a positive relationship. However, there are several limitations in this literature. First, the unit of analysis for which crime is examined is relatively large (e.g. country, states and large metropolitan areas). Various studies suggest that the appropriate geographical unit to study crime might well be much smaller, such as neighborhood. Some recent studies have examined crime at the commune, city block, police precinct level, respectively, but none of these studies address the issue of local inequality and crime. Second, comparability of definitions of crime categories and well-being indicators poses serious problems for most cross-country studies. Finally, most studies treat crime markets as closed, meaning that only the characteristics of own area, and not those of neighboring areas, are allowed to influence the crime rates. This assumption quickly loses appeal when geographical units are such that travel for legitimate or illegitimate activities between them is plausible. Using data for the eight categories of crime during 1998-2002 in three cities of the US (Nashville, TN; Portland, OR; and Tucson, AZ), I address the limitations summarized above. The geographical unit used in the analysis is block group. The results show that, controlling for economic and structural characteristics, there is statistically significant correlation between local inequality and levels of almost all categories of crime. The unemployment rate and racial heterogeneity are powerful predictors of the level of crime in an area. However, results do not support the hypothesis that criminals travel to wealthier areas in order to commit crime. Finally, I find strong evidence in support of both the Social Control and the Routine Activities theories.
    Keywords: crime; local inequality; unemployment; catchment area; unit of analysis; count regression models
    JEL: D63 D74 R12
    Date: 2009–05–15

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