New Economics Papers
on Law and Economics
Issue of 2010‒11‒06
four papers chosen by
Jeong-Joon Lee, Towson University

  1. The Determinants of State-Level Caps on Punitive Damages: Theory and Evidence By Thomas J. Miceli; Michael P. Stone
  2. Organization and Information in the Fight against Crime: An Evaluation of the Integration of Police Forces in the State of Minas Gerais, Brazil By Soares, Rodrigo R.; Viveiros, Igor
  3. Non-collusive Corruption: Theory and Evidence from Education Sector in Bangladesh By Ratbek Dzumashev; Asadul Islam; Zakir H. Khan
  4. Deterrence from self-protection measures in the ‘market model’ of crime: dynamic panel data estimates from employment in private security occupations By Zimmerman, Paul R.

  1. By: Thomas J. Miceli (University of Connecticut); Michael P. Stone (Quinnipiac University)
    Abstract: Under the standard economic model of torts, punitive damages correct for imperfect detection. Incorporating litigation costs into the model provides a justification for punitive damage caps. At the optimum, caps balance deterrence against the cost of litigation. Empirical testing of the model is performed via Cox proportional and parametric hazard analyses, using a panel dataset from 1981 to 2007. The results reveal a positive relationship between judicial and legal expenditures (a proxy for legal costs) and cap enactment, and a negative relationship between state GSP (a proxy for damages) and cap enactment. Cap enactment is also influenced by political ideology.
    Keywords: Deterrence, litigation costs, punitive damages, statutory caps
    JEL: K13 K41
    Date: 2010–10
  2. By: Soares, Rodrigo R. (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Viveiros, Igor (Federal University of Ouro Preto)
    Abstract: This paper explores the experience of information sharing, coordination, and integration of actions of the Civil and Military Polices in the state of Minas Gerais, Brazil, in the context of the IGESP program. The IGESP is based on the introduction of information management systems and organizational changes akin to those associated with COMPSTAT. All the evidence presented points to a causal effect of the IGESP on crime. The most conservative estimates indicate a reduction of 24% in property crimes and 13% in personal crimes. There is also evidence that the IGESP is associated with improved police response, measured by apprehension of weapons and clearance rates. We present one of the first set of causal estimates – with a clear identification strategy – of the impact of COMPSTAT-like programs. The results suggest that the coordination and informational gains represented by the program may constitute a first-order factor in a successful policy for fighting crime.
    Keywords: crime, police, Brazil, COMPSTAT, impact evaluation
    JEL: H11 K00 K42
    Date: 2010–10
  3. By: Ratbek Dzumashev; Asadul Islam; Zakir H. Khan
    Abstract: We study non-collusive corruption in the education sector. For this purpose, we construct a simple theoretical model that captures non-collusive corruption between service providers (teachers) and service demanders (students). The model shows that the bribe paid by the service demander increases with the level of red tape and her income level, but it decrease with the improvement of the individual’s social status. We also establish that with the increase in the income and the social status of the private agent (networks), the probability of paying bribes and the severity of red tape declines. Then we use a survey data set collected in 2007 by Transparency International Bangladesh, to test the predictions of the model. The estimations confirm that both the probability of being subjected to noncollusive corruption and the cost of corruption is related to the individual characteristics of the bribe payer. Moreover, network connections are an important factor that helps to ease the burden of corruption on private agents, which is also likely ensuring the persistence of this type of corruption.
    Keywords: Education, non-collusive corruption, bribery, Bangladesh
    JEL: K4 O1
    Date: 2010–05
  4. By: Zimmerman, Paul R.
    Abstract: Private individuals and entities invest in a wide variety of market-provisioned self-protection devices or services to mitigate their probability of victimization to crime. However, evaluating the effect of such private security measures remains understudied in the economics of crime literature. Unlike most previous studies, the present analysis considers four separate measures of private security: security guards, detectives and investigators, security system installers, and locksmiths. The effects of laws allowing the concealed carrying of weapons (an unobservable precaution) are also evaluated. Given that Ehrlich’s ‘market model’ suggests private security is endogenous to crime, the analysis relies primarily on dynamic panel data methods to derive consistent parameter estimates of the effect of self-protection measures. The relationship between self-protection and UCR Part II Index offense (arrest) data are also considered in order to provide exploratory evidence on the interaction between publicly and privately provisioned crime deterrence efforts.
    Keywords: Crime; Deterrence; Market model; Private Security; Self-protection
    JEL: K42
    Date: 2010–10–25

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