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Governmental (In)Eciencies on Detriment of Crime

Author

Listed:
  • Agustin A. Shehadi C.
Abstract
By using data from the Ministry of Security of the Argentine Republic for the year 2017, this paper aims to estimate the degree of substitution between public and private spending, placing in the core of study the relationship between the level of government efficiency and private spending on security. With information about the 24 Argentine jurisdictions, this work uses an autoregressive spatial model (SAC), to control for presumed autocorrelation in the residuals, in order to achieve consistent and unbiased estimations. In this line, the discrepancy between reported crimes and the number of convicts jailed under the respective sentence is taken as an efficiency measure of the government. In this way, the results show the expected signs, except for threats, for which the measure of efficiency takes the opposite sign (i.e. as greater the public spending is, greater private expenses), denoting an inefficiency of government spending. We attribute this finding to the fact that individuals perceive governmental action upon threats as insufficient, hence inducing private spending to cover the public inefficiency.

Suggested Citation

  • Agustin A. Shehadi C., 2020. "Governmental (In)Eciencies on Detriment of Crime," Asociación Argentina de Economía Política: Working Papers 4412, Asociación Argentina de Economía Política.
    • Handle: RePEc:aep:anales:4412
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    File URL: https://aaep.org.ar/works/works2020/Shehadi.pdf
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    References listed on IDEAS

    as
    1. Clotfelter, Charles T, 1977. "Public Services, Private Substitutes, and the Demand for Protection against Crime," American Economic Review, American Economic Association, vol. 67(5), pages 867-877, December.
    2. Chiu, W. Henry & Madden, Paul, 1998. "Burglary and income inequality," Journal of Public Economics, Elsevier, vol. 69(1), pages 123-141, July.
    3. Thaler, Richard, 1978. "A note on the value of crime control: Evidence from the property market," Journal of Urban Economics, Elsevier, vol. 5(1), pages 137-145, January.
    4. Cherry, Todd L. & List, John A., 2002. "Aggregation bias in the economic model of crime," Economics Letters, Elsevier, vol. 75(1), pages 81-86, March.
    5. Kelly C. Bishop & Christopher Timmins, 2011. "Hedonic Prices and Implicit Markets: Estimating Marginal Willingness to Pay for Differentiated Products Without Instrumental Variables," NBER Working Papers 17611, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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