Bryan Caplan  

Why Do the Poor Commit More Crime?

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Demographics and Income Distri... Ratio of Violent to Drug Offen...

Most economists have a glib answer: The worse your legal options, the better crime looks. But the more I think about this response, the weaker it seems. Here's a striking fact about crime: A lot of it is almost never lucrative. There's little money in assault, drug possession, or drunk driving, to take some of the main offenses that land people in jail. The same goes for rape, and probably most murder too.

These observations bring to mind the famous Levitt-Dubner observation that a lot of drug dealers earn minimum wage. They have a "tournament" story - the superstar payoffs for the drug lords at the top of the pyramid attract massive entry at the bottom. But there's a much simpler theory: Dealing drugs - like most illegal behavior - is an inane strategy for escaping poverty.

What's my alternative? Crime is just one of many, many "social pathologies" that are over-represented among the poor: alcoholism, drug abuse, smoking, obesity, illegitimacy, etc. None of these are good escape routes from poverty. So instead of trying to explain why "poverty causes crime" or "poverty causes obesity," it makes sense to look for common causes of poverty and social pathologies.

Like what? In a paper just accepted by Kyklos, Scott Beaulier and I point to a simple candidate: irrationality. People who have biased beliefs about practical matters, and/or exercise poor impulse control, are likely to screw up their lives across the board. So it's hardly surprising that poverty and self-destructive behavior go hand in hand. Rather than being a natural response to poverty, a lot of crime can be seen as objectively self-destructive behavior that happens to have an unusually large amount of collateral damage.

Update: "Drug driving" was a typo; I meant to write "drunk driving." Sorry for any confusion.


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The author at De Gustibus Non Est Disputandum in a related article titled Caplan e sua irracionalidade racional writes:
    O cara não pára. Agora, até a economia do crime (onde está o Ari, meu Deus?) ele ataca. Claudio p.s. o André, eu entendo, a filha dele acabou de nascer. O Colistete, pelo visto, não vai colocar nada aqui (vou... [Tracked on June 14, 2007 8:15 PM]
COMMENTS (25 to date)
Mark Seecof writes:

Criminality is inversely proportional to IQ. Not that this belies your cause-of-crime theory, but those poor immigrants you want to bring into the US have low (mean) IQ. They therefore exhibit increased (mean) propensity for crime. When you consider that many immigrants from poor countries are more enterprising, higher-IQ individuals selected from a low (mean) IQ source population and IQ is at least 60% heritable, regression to the mean predicts their offspring will exhibit still lower mean IQ, hence even greater criminal propensity. These considerations alone should be reason to exclude low-IQ immigrants from the US.

Mark Seecof writes:

Okay, before some pettifogging comment-lawyer jumps on me, criminality is not perfectly inverse to IQ: there is an IQ threshold below which individuals are too disabled even for a career of violent crime. But in the 70-130 IQ range, and washing out (fairly) the usual confounding influences and circumstantial or definitional issues, IQ down means criminality up.

Matthew c writes:

All very true.

I do seem to react a bit irrationally to this topic though. What really annoys and bothers me is that a great deal of the evil in the world is committed by smart and successful people -- for example the founders of the communist countries and the Third Reich. This is practically never brought up when discussing the costs of low income immigrants, and other discussions on the wonderfulness of high IQ. I think the faith of many that a high-IQ society would be a utopia is sadly misplaced.

Matthew c writes:

BTW I wrote my previous comment BEFORE reading Seecof's (rather predictable) response.

Horatio writes:

Mark
A thorough cost-benefit analysis would be needed to justify excluding/including low-IQ immigrants. You have only given a small part of the picture. If someone in business tried to put down a project using a level of analysis similar to yours, they would soon be unemployed.

Impulse control is probably the biggest factor in wealth accumulation and criminal behavior.

"Dealing drugs - like most illegal behavior - is an inane strategy for escaping poverty."

Perhaps dealing drugs at the street level is inane, but a supplier can get rich quick. So quick that the police may not hear about him until he was retired. In my more adventurous days in South Florida, I knew a guy who made enough in two years to retire. Someone with enough knowledge of chemistry (an A.S. is enough) and the right connections could steal much of the US MDMA market from the Dutch and Israelis.

Mark Seecof writes:

(Deep sigh.)

Why do people think anecdotes about rare examples refute well-founded statistical measures of large populations?

Your filthy- rich- after- two- years- supplying- drugs- guy is a statistical outlier. He's gotta be at least 3 or 4 standard deviations off the mean. He tells us almost nothing about the great multitude of less-adept criminals.

In particular he tells us nothing about whether the likes of Ricardo Gastelum-Almeida should be excluded from the United States.

"Impulse control" may be the key factor in criminality (though I don't certify that), but it is not the most salient factor in "wealth accumulation." IQ is.

We have "evidence that cross-country IQ tests are useful—perhaps crucial—predictors of the average productivity of workers from different countries." (Jones and Schneider, 2006).

Like it or not, impulse control or not, both the productivity-IQ and the crime-IQ relationships are repeatable and predictive.

You may be surprised to learn that people have made cost-benefit analyses of immigration. However, people disagree over the bottom line, usually after they disagree over which costs and benefits to include and how to estimate them. For example, Arnold Kling excludes almost all costs other than wages paid to immigrants (which of course essentially match the benefits derived from their labor, so net out to nil). He then counts immigrants' gains (over the base value of remaining in their home countries) as benefits, even though by definition such gains do not accrue to (current) Americans. Most economists estimate immigrants' contributions to US economic growth as benefits, but some estimate that all immigrants contribute equally to economic growth while others recognize that some immigrants (high-wage/high-IQ) contribute to growth while others (low-wage/low-IQ) probably retard it--so they qualify their analyses accordingly. Some economists consider the income lost to American citizens with whom immigrants compete for jobs to be a loss, some consider it a wash (because workers' losses are employers' gains) or even a benefit (because employers' profits increase). Some economists count social-welfare spending on immigrants in the cost column. Some economists ignore social-welfare spending. Many economists ignore the costs of increased crime (which include direct losses to victims, the direct costs and associated deadweight losses of policing, etc., and the opportunity costs of diverting public and private resources into security (would you rather buy window-bars and door-gates, or take a ski vacation?). Finally, economists disagree about whether to include any estimate of costs due to immigrants' descendants (who consume astonishingly large amounts of welfare, education, and criminal-justice spending, and impose stiff opportunity costs on native parents and children) in their analyses. Most do not, even though those costs are real and would not be incurred but for the immigration which enables them.

I've read a fair number of immigration cost/benefit analyses or commentaries based thereupon and I feel confident in saying that while the costs of low-wage (low-IQ) immigration (measured or predicted) are large and well-documented, the benefits (real or predicted) are small or speculative. Just to give you a flavor of this, we know for certain that the value of low-wage labor is low--because we can measure the value of the labor by wages offered--low wages, low value. On the other hand, we know that the costs of illegal (mostly low-wage) immigrants are high, even before we account for the crime they generate.

Beyond all the obvious costs, though, are the really long-term costs of low-IQ immigration (which describes most illegal immigration to the US at the present time). On our experience so far, unrestricted immigration would damage America's political culture and average human capital; the very factors which make economic growth possible. I've asked before, but none of the pro-immigration blogging economists seems willing to answer: why is the US so much richer than Mexico? (It's not because Mexico lacks for population (labor) or natural resources.) Just like all those immigrants and wanna-be immigrants, I prefer life in the US and expect it to provide a better future for my kids than life in any less-developed country--Mexico is richer than most! The only apparently- meaningful differences between the USA and (e.g.) Mexico lie in the qualities of their respective populations. To a first approximation, importing people from less-developed countries is the same as importing those countries' problems.

If you skipped it above, I suggest you review the Jones and Schneider paper before you reply.

Nathan Benedict writes:

Mark--a couple of questions:

1) Would you be in favor of semi-open immigration? Anyone can come if they top a certain score on an IQ test or have other special skills?
2) How about deporting stupid people already here?
3) What specifically has caused the U.S.'s population to be smarter and more productive than that of other countries? It is, after all, a nation built on 400 years of open borders and unrestricted immigration. I suspect, although I can't prove, that even with open borders, those who chose to immigrate would tend to be statistical outliers from the general population of their home countries. I imagine that this effect is largely what has contributed to America's success so far. Our current policy has rather perverse consequences--anyone from Mexico can sneak over the border to the U.S., but those who do tend to be uneducated, because Mexican doctors and engineers can't practice as doctors and engineers if they're in the U.S. illegally, whereas unskilled laborers can. Open borders at least lets us balance this out with hard working, skilled, and entrepreneurial immigrants from China, Africa, India, and other places that would love to come here but don't have a border to sneak across.

Bruce G Charlton writes:

I would say that short-termism is a better explanation of crime and self-destructive behaviour than 'irrationality'.

Short termism is natural and spontaneous (think children) - it means living mainly by the evolved instincts which worked well in hunter gatherer societies. But these instincts become destructive under modern conditions (eg living for pleasure in the HG world was adaptive - since the ways of attaining pleasure were associated with greater reproductive success).

We all start out short termist and instinctive, we learn - to varying degrees - to be long termist and rational.

Higher educational level is associated with greater long-termism, which uses rational thinking to achaieve its goals.

BTW some crimes are economically motivated - like mothers stealing food from shops; others are status seeking - like many male crimes of confrontation and violence. Status seeking criminals advertize their crimes among their peers (that is the point of doing them) - which is why they usually get caught.

dearieme writes:

My father's conclusion after a lifetime in business was that the crooks were usually people who were too stupid or incompetent to run a business honestly and profitably. He was talking about businesses on the small-to-medium scale. Big Business often had standards that he found laughable.

CJB writes:

I wandered into this site by accident. I am not professionally involved in economic theory. I am a woman who has lived on the Mexican border (El Paso,TX) for 43 years. I have read all these comments and don't find much connection to reality here. In all the years I have lived here in a town which is close to 80% hispanic, I have employed over 100 persons who were either illegal or US citizens at the poverty level. I have a teaching background, so I recognize intelligence and the lack of it. I have employed some very talented and intellegent poor people and some horribly stupid ones. Many of these have lived freely in the house with me, day and night. I am writing to tell you that none of these individuals have ever done me or my family any harm. And, they all had full opportunity to take advantage of us. Once, one stole some of my stored clothing. Besides that they have only benefitted me, in the extreme. I think they benefitted too, but I got the most benefit. All these people obviously were from Mexico. I will end by saying that regardless of what I have just written, I am firmly against the broad adoption (amnesty) of illegal aliens. Because...my experience has been that none of my employees WANTS to be American. They love their OWN country even though its system of government oppresses them and denies them economic opportunity. American citzenship is a priveledge which carries both rights, and responsibility. Only a very few individuals I have known want a new allegiance. They want survival for themselves and their families. I wish we could help them have a better life in their own country.

Stephen W. Stanton writes:

"A lot of it is almost never lucrative"

Two comments:
1. People are poor because they either can't or don't do things that are financially lucrative
2. Drugs are fun. Rich folks use their money to have legal fun (champagne, fancy dinners, private jets. etc.) Poor criminals get the most bang for the buck from the chemical high produced by illicit drugs or endorphins created through aggression.

In a nutshell... Money is only a store of value. Poor people don't get a lot of money, so they directly seek the cheapest forms of value. Therefore, don't focus on dollars when looking for incentives.

Personally, I like money just fine... But I care more about what money can do for me. If I can have spectacular goods, services, and experiences without paying for them... That's great, but it won't show up in any dollar-based statistics.

The chance to meet the president, or appear on TV, or swim in a Mexican ceynote, etc... These are all free, yet have VERY high utility for some folks.

Short of that... Don't discount the allure of a cocaine high or the intoxicating sense of power from violent acts that establish dominance. People like pleasure, and we also like "winning" in status games. Violence is the most basic way to do that.

As for me personally... An occasional beer and a brief stint in rugby satisfy any urges I had in this direction.

Horatio writes:

Mark

I excluded street dealers before asserting that supplying drugs can be a lucrative career. I certainly have a better picture of what actually happens to suppliers than you do. Do you have any experience in those markets? Government statistics do not begin to reveal the realities of the drug markets in this country. The vast majority of suppliers do not get into serious trouble. However, most suppliers switch careers before making enough to retire. The general can usually see his infantry get trampled in time to get the hell off the battle field. The closer he is to the street, the more likely he is to lose it all.


As for immigration, I've read the studies and have concluded that it is a positive NPV investment for me. The long-term benefits for the average Joe and his descendants are more fuzzy, though the best analysis predicts a small net benefit. The anti crowd has little business sense. Imagine if I rejected a business proposal because ROE was less than the average of the other endeavors of my firm. What matters is NPV. If the money/effort can't be invested into something with a greater NPV, immigration is the way to go.

Cam Vidler writes:

I like Bruce's take. Just because it doesn't make business sense (in a homo economicus way), doesn't mean it isn't rational.

I think perception is extremely important here. If one perceives, like those living in perpetually poor neighbourhoods, that they have little chance of succeeding in the mainstream, there may be more lucrative pay-offs (monetary or not) that they can seek in the criminal world. Many of these criminals have been raised on myths like "we're oppressed," "you need street cred," "don't sell out your neighbourhood," etc.

When one has little contact with those who have been successfully legit, the expected "utility," if I can call it that, of pursuing legal activities is low. Even if the perception is wrong, that doesn't matter, it is real to the holder. Why go legit if it means you're going to work at Mcdonalds while your friends and family laugh at you for "trying to make it in a rich/white man's world"? Why not just join your gang-banging friends who seem to get more social respect than you, more girls than you, and more money than you (again, perception matters more than reality here).

So in economic terms, a flawed perception can be treated much the same as a lack of information, therefore resulting in less efficient decision-making. But in the sense that the actor is trying to achieve an end (social status, money, etc.) and selects what he perceives as the best means to get there (crime), he is acting rationally.

Cam Vidler writes:

Subjective utility anyone?

Cam Vidler writes:

Steve's point seems to be similar too.

Mensarefugee writes:

Nathan Benedict asked:
3) What specifically has caused the U.S.'s population to be smarter and more productive than that of other countries? It is, after all, a nation built on 400 years of open borders and unrestricted immigration. I suspect, although I can't prove, that even with open borders, those who chose to immigrate would tend to be statistical outliers from the general population of their home countries.
=------------------------------------------

Over and above only the smarter people being willing to emigrate, there were restrictions on who was allowed to immigrate.

See this latest post on GNXP

Excerpt

...The founders of Massachusetts, unlike rulers of other European colonies, deliberately excluded an aristocracy from their ranking system.

At the same time, the leaders of Massachussets also made a concerted and highly successful effort to discourage immigration from the bottom of English society. They prohibited entry of convincted felons (many of whom ahd been punished for crimes of poverty) and place heavy impediments on the path of the migrant poor. A series of poor laws were enacted in Massachusetts, which rules of settlement and "warning out" that were even more strict than in England.

Floccina writes:

Crime dropped in the great depression and rose sharply in the mid 1960s just as prosperity started growing. Professional athletes commit crimes at a fairly high rate. India has a crime rate about equal to the USA. I could go on and on.

Crime may correlate with poverty but seems not to be causal. What ever causes poverty may cause crime.

Floccina writes:

BTW Mark Seecof in you opinion why are El Paso TX, Corpus Christi TX and Austin TX among the cities in the USA with the lowest crime rates?

paul writes:

Scott Beaulier and I point to a simple candidate: irrationality. People who have biased beliefs about practical matters, and/or exercise poor impulse control, are likely to screw up their lives across the board.

Isn't that a tautology? Has economics fallen so far that realizing there are stupid people is considered a modern insight?

Matt writes:

paul, where have you been for the past 40 years? The entire society has fallen. Economics is trying to pick up some of the pieces.

Mark Seecof writes:

In fact, El Paso et-cetera do not have low crime rates.

Take a look at this UCR table. The El Paso MSA reported a 2005 violent crime rate of 409/100K. Check out the table rows just above and beneath: Elmira, NY and Erie, PA reported violent crime rates of 232/100K and 261/100K, respectively. Corpus Christi reported 602/100K. Even Austin managed 346/100K, though is a very rich city, being both Texas' State capital and high-tech hub.

None of your cities is a contender for top honors, though. Just noodling around we see Lubbock, TX reported 904/100K!

Now, to be fair, for those MSA's (only) if we just glance at 2000 Census data, neither percentage of population that was Hispanic nor percentage of population that spoke a language other than English seems to predict their 2005 violent crime rates (see, e.g., http://censtats.census.gov/data/TX/390482320.pdf ). However, that sample is too small support any conclusions (and my brief-glance analysis too weak to uncover any subtle correlations).

Also, Texas' 2005 felony incarceration rate was 691/100K, which is 159% of the US (State) average rate (435/100K). Most analysts think the incarceration rate (over time) is a proxy for the level of deterrence required to moderate the crime rate. Or to put that another way, the Texas crime rate might increase if Texas locked up fewer criminals.

It's hard to compare crime rates--much less the underlying criminal propensities of various segments of the population--across jurisdictions with different incarceration rates. To the extent that deterrence levels differ, someone with a given propensity for crime who would live within the law in a high-deterrence jurisdiction may become an active criminal after migrating to a lower-deterrence jurisdiction.

(Note that a high deterrence level (for which incarceration rate is a proxy) is very costly. Besides the direct cost for gates, police, prisons, etc. we must recognize a high opportunity cost--all the things Texans could buy if they didn't have to lock up so many people.)

Horatio writes:

A minor correction to my previous post

ROE -> ROI

The letter I in my first language is pronounced the same way as E is in English.

Steve Sailer writes:

Don't forget testosterone. Men commit more crimes than women, and higher testosterone racial groups tend to commit more crimes.

TGGP writes:

Wow, Mark Seecof, your third post is exactly what I would have written had the internet been working only much better. I was also about to link to the GNXP post but then noticed that someone else had as well.

Another thing to remember: the United States was a colony of England. It is in many ways similar to its mother country, Canada, Australia and New Zealand. Latin American countries tend to be more similar to each other than they are to Anglosphere countries. Are we to believe this is a coincidence, or just because it is too hot down there (that actually might explain a bit, like the relative backwardness of the American south before air-conditioning and "the sunbelt")?

Matt C: Yes, smart people have done some terrible things when they got in charge. However, do we see more or less awful government in relatively smart countries compared to lower IQ ones? It seems to me that the relationship is almost monotonic, with the only prolonged exceptions being Russia and much of East Asia under communism.

TGGP writes:

Steve, I didn't notice your post until I posted. I think the testosterone angle could also be applied to age. Someone should do a study of inmates to see if they have elevated levels of testosterone compared to their age-race-gender group.

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