People with lower incomes commit more crimes.
This new paper set out to test whether increasing peoples incomes would reduce their crime rate, and found that randomly giving people money did NOT reduce their crime rate.
There are 2 theories on why poor people commit more crimes:
1) Lack of financial resources creates crime:
They commit crime to get money. If this is true, giving them money would reduce their crime rate.
2) Third variable causality:
Negative correlation between income and crime may not be causal but could be caused by a third variable correlated with both income and crime, such as higher IQ or greater conscientiousness. This implies that giving people money may not reduce their crime rate.
Cesarini et al.'s study used a natural experiment to test these theories. They analyzed the crime rates of 280,000 lottery winners (including prize-linked savings winners) and compared them to similar non-winners.
The results showed that:
1) There is a causal relationship between income and crime.
2) Randomly increasing people's income does not reduce their crime rate.
The evidence supports the third variable causality theory, meaning that the negative correlation between income and crime is not due to the lack of financial resources but could be caused by other factors correlated with both income and crime.
via @ATabarrok
This new paper set out to test whether increasing peoples incomes would reduce their crime rate, and found that randomly giving people money did NOT reduce their crime rate.
There are 2 theories on why poor people commit more crimes:
1) Lack of financial resources creates crime:
They commit crime to get money. If this is true, giving them money would reduce their crime rate.
2) Third variable causality:
Negative correlation between income and crime may not be causal but could be caused by a third variable correlated with both income and crime, such as higher IQ or greater conscientiousness. This implies that giving people money may not reduce their crime rate.
Cesarini et al.'s study used a natural experiment to test these theories. They analyzed the crime rates of 280,000 lottery winners (including prize-linked savings winners) and compared them to similar non-winners.
The results showed that:
1) There is a causal relationship between income and crime.
2) Randomly increasing people's income does not reduce their crime rate.
The evidence supports the third variable causality theory, meaning that the negative correlation between income and crime is not due to the lack of financial resources but could be caused by other factors correlated with both income and crime.
via @ATabarrok
More from Marginal Revolution:
and the original paper: marginalrevolution.com/marginalrevolu…
nber.org/system/files/w…
and the original paper: marginalrevolution.com/marginalrevolu…
nber.org/system/files/w…
Btw I share @ATabarrok’s concern on the study that perhaps $20k isn’t enough to make a difference
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