A Note on Marginal Deterrence: Evidence
Working Paper CRENoS, No. 2013-10, (with B.McCannon and M.Vannini)
Abstract: Empirical evidence of the marginal deterrent effect is provided. Exploring a data set of kidnapping crimes in Sardinia between 1960 and 2012 changes in Italian policy regarding sanctions for kidnapping and their associated impact on murders is considered. Deaths associated with kidnappings increase in prevalence when the kidnapping sanction increased, causing a decrease the marginal sanction for murder. Death rates reversed when enhanced sanctions for murder were later introduced.
The effect of socio-economic and emotional factors on gambling behaviour
Working Paper CRENoS, No. 2013-05, (with A.Bussu)
Abstract: Gambling represents a channel through which some relevant aspects of our social life, such as audacity, competition and risk, manifest themselves. Gambling is both a pleasing diversion and a way of socialisation, where gratification and problematic issues alternate. Most gamblers are social players who participate in games without any relevant implications on their life, regardless of how frequently they engage in the activity. Unfortunately, in some cases gaming activities can have a dramatic impact on the player to the point that he/she has little control over them. In such cases, the approach to gaming can be defined as critical or even pathological. Pathological gambling is a serious form of addiction that causes gamblers to suffer from social and financial problems as they constantly look for ways to increase their “dose”. This study proposes a bivariate ordered probit approach aimed at examining the emotional factors of gambling expenditures and problematic behaviour or addiction while also controlling for socio-economic determinants. It is based on a survey among 1,315 gamblers in Sardinia (Italy) in the time span from June 2004 to March 2005. To measure gambling-related problems and gaming addiction we use survey responses on the existence of problems caused by game participation (in terms of psychological, relational, economic, labour difficulties directly linked to gambling) and on the need for help and/or the intention to stop the gambling experience. The findings show that women bet less than men and that income and gambling frequency are positively correlated with the amount of money allocated to gambling. Furthermore, having a sense of omnipotence and being willing to replay in case of a win increase the propensity to bet more money. Notably, women have a higher probability to be problematic gamblers after controlling for all other characteristics. Income is negatively associated with problematic gamblers while those who experience guilt or frustration after a loss and bet a higher amount of money have a higher probability of exhibiting gambling-related problems. Those who have other players in their family (wife/husband, children, brother/sister, parents and grandparents), do not play alone and gamble for many hours a day have a higher probability to become pathological gamblers. In addition, income positively affects the probability to have pathological consequences while education is negatively correlated to it. Finally, experiencing satisfaction in case of a win, disappointment in case of loss and excitement in the middle of the game is negatively associated with pathological players.
The economic consequences of crime in Italy
Working Paper CRENoS, No. 2013-03, (with O.Carboni)
Abstract: This paper employs provincial data to study the relationship between several crime typologies, namely murder, theft, robbery and fraud, and economic output in Italy. We employ a spatial econometric approach where the spatial proximity is defined by a measure of physical distance between locations, in order to take into account possible spill-over effects. The model used here combines a spatial autoregressive model with autoregressive disturbances. In modelling the outcome for each location depends on a weighted average of the outcomes of other locations. Outcomes are determined simultaneously. The results of the spatial two stage least square estimation suggest that the homicide rate has a negative impact on Italian gross domestic product while theft, robbery and fraud do not affect economic output and that there are beneficial spill-overs from neighbouring provinces.
Comparative efficiency of producer cooperatives and conventional firms in a sample of quasi-twin companies
Working Paper CRENoS, No. 2012-28, (with M.G. Brandano and M. Vannini)
Abstract: We investigate the comparative technical efficiency of producer cooperatives (PCs) and conventional firms (CFs) by looking at the performance of a mixed sample of Sardinian wine producing companies over the period 2004-2009. Thanks to the similarity of the habitats in which the firms operate, the peculiarities of the production environment, and the careful measurement of some key inputs through suitable aggregation of accounting data, the observed units are “twins” in all nonorganizational respects, providing one natural setting for comparative work. The analysis is carried out in two steps: in the first, technical efficiency indicators for each firm in each year are calculated using DEA with reference to a common production frontier. Subsequently, the measured efficiency scores become the dependent variables of a pooled truncated maximum likelihood regression in which we control for both internal and external effects and firm type. Moreover, a double bootstrap procedure is run to compute the standard errors and confidence intervals of the coefficients estimates. According to our findings cooperatives are less technically efficient than their capitalist counterparts. A result which is particularly worrying in light of the forthcoming liberalization of the EU wine sector and the unique economic and social role played by cooperatives in the rural world.
A time varying parameter approach to analyze the macroeconomic consequences of crime
Working Paper CRENoS, No. 2010-02 (with E. Otranto)
Abstract: Criminal activity performs like a tax on the entire economy: it discourages domestic and foreign direct investments, it reduces firms’ competitiveness, and reallocates resources creating uncertainty and inefficiency. Although the impact of economic variables on crime has been widely investigated, there is not much concern about crime also affecting the overall economic performance. This work aims to bridge this gap by presenting an empirical analysis of the macroeconomic consequences of criminal activity. Italy is the case study for the time span 1979-2002. Dealing with a state space framework, a time varying parameter approach is employed to measure the impact of criminality on real Gross Domestic Product along time, and to measure the asymmetric impact in recession and expansion periods. The analysis is completed evaluating the effects of crime fluctuations in the long period by an impulse response analysis
Assessing substitution and complementary effects amongst crime typologies
MPRA Paper 20046, University Library of Munich, Germany (with M. Pulina)
Abstract: This paper aims at assessing how offenders allocate their effort amongst several crime typologies. Specifically, complementary and substitution effects are tested amongst number of recorded crimes. Furthermore, the extent to which crime is detrimental for economic growth is also tested. The case study is Italy and the time span under analysis is from 1981:1 up to 2004:4. A Vector Autoregressive Correction Mechanism (VECM) is employed after having assessed the integration and cointegration status of the variables under investigation. The main findings are that a bi-directional complementary effect exists between drug related crimes and receiving, whereas a bi-directional substitution effect is detected between robberies, extortions and kidnapping and homicides and falsity, respectively. Furthermore, economic growth produces a positive effect on the growth of homicides, receiving and drug related crimes; while, the growth in robberies, extortion and kidnapping and falsity have a crowding-out effect on economic growth.
Does more crime mean fewer jobs? An ARDL model
Working Paper CRENoS, No. 2009-05 (with M. Pulina)
Abstract: This paper analyses how a set of economic variables and a deterrence variable affect criminal activity. Furthermore, it highlights the extent to which crime is detrimental for the economic activity. The case study is Italy for the time span 1970 up to 2004. An Autoregressive Distributed Lags approach is employed to assess the cointegration status of the variables under investigation. A Granger causality test is also implemented to establish temporal interrelationships. The main finding is that all crime typologies, but homicides and fraud, have a crowding-out effect on legal economic activity, reducing the employment rate.