We develop a dynamic life-cycle equilibrium model of crime with heterogeneous agents and human capital accumulation. Agents decide at each point in time whether to commit crimes by comparing potential gains from crime to the expected loss due to the probability of apprehension and the associated cost (incarceration and reduced future wages in the legal labor market). Public security policies are defined as pairs of a size of the police force and an average length of sentences. We propose an original micro-founded public security technology linking the level of police expenditures to the probability of arrest. Plugging this technology in the dynamic equilibrium framework allows us to evaluate public security policies.
Equilibrium effects can be potentially relevant because of dynamic interactions between the classical incapacitation and deterrence effects. Using this model, we explore the optimality of policies in a way that would not be possible with reduced form empirical estimates or with the traditional, partial equilibrium, static, theoretical models of crime. We estimate the model with US property crime data from the 2000s and conduct some quantitative exercises. The calibrated model points to overspending in police protection when compared to the optimal public security policy. Rodrigo Soares is the Lemann Professor of Brazilian Public Policy and International and Public Affairs and Affiliated Professor of Economics at Columbia University. His research centers on development economics, ranging from health and demographic economics, to crime, labor economics, and history and institutions. His work has appeared in various scientific journals, including American Economic Review, Journal of Political Economy, American Economic Journal: Applied Economics, Journal of Public Economics, and Journal of Development Economics, among various others.
Before joining Columbia, Rodrigo taught at the Sao Paulo School of Economics-FGV, PUC-Rio, the University of Maryland, and the Harvard School of Public Health. In 2006, he was awarded the Kenneth J. Arrow Award from the International Health Economics Association for the best paper published in the field of Health Economics. Rodrigo is research fellow at the Institute for the Study of Labor (IZA, Germany), research affiliate at J-PAL Latin America, and associate editor of the Journal of Human Capital, of the Journal of Demographic Economics, and of the IZA Journal of Development & Migration. He is also an honorary member of the Latin American and Caribbean Economic Association. Rodrigo has acted as a consultant for the World Bank, the Inter-American Development Bank, and state governments in Brazil on issues related to crime and violence, health, and development. He received his PhD in Economics under the guidance of Gary S. Becker at the University of Chicago in 2002.
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