We shot videos of criminal trials using 3D Virtual Reality (VR) technology, prosecuted by actual prosecutors and defended by actual defense attorneys in an actual courtroom. This is the first paper that utilizes VR technology in a non-computer animated setting, which enables us to replace white defendants with individuals who have Middle Eastern or North African descent in a real-life environment. We alter only the race of the defendants in these trials, holding all activity in the courtroom constant, creating arguably perfect counterfactuals ( Master’s level Economics and Law students, and undergraduate economics students are randomly assigned to watch, with VR headsets, the trials that differed only in defendants’ race. Background information obtained from these evaluators allowed us to identify their cultural heritage. Evaluators made decisions on guilt/innocence as well as prison sentence and fine in accordance with the guidelines provided by the relevant law. By design, the race of the defendant is uncorrelated with the characteristics of both the prosecutors and the defense attorneys, as well as with any activity in the courtroom. Defendant race is also uncorrelated with evaluator attributes. We find that both white and minority evaluators are harsher towards minority defendants during the conviction decision. In the sentencing phase defendants receive favorable treatment from evaluators of their own race. This pattern of behavior leads to significant bias against minorities at all stages: conviction, prison sentence, and fine, which is partly the reflection of the fact that the numerical majority of the evaluators are white. Evaluators’ concerns about terrorism do not impact the racial biases in these decisions. The same racial bias is observed in the decisions of practicing attorneys. Adding a small number of prosecutors and judges to the sample of attorneys generates similar results as those obtained from the attorney sample.

This paper contributes to the debate on the impact of juvenile crime punishment on high school completion and adult recidivism. We link the universe of case files of those who were convicted of a crime as a juvenile in a southern U.S. state to the public school administrative records and to adult criminal records. We exploit random assignment of cases to judges and use idiosyncratic judge stringency in imprisonment to estimate the causal effect of incarceration on high school completion and adult crime for marginal convicted juvenile. Incarceration has a detrimental effect on high school completion for earlier cohorts, but it has no impact on later cohorts, because the school reform implemented in the state in the early 2000s negatively impacted the graduation rates of non-incarcerated students. We find that incarceration as a juvenile has no impact on future violent crime, but that it lowers the propensity to be convicted of a property crime. Finally, juvenile incarceration increases the propensity of being convicted for a drug offense in adulthood.

Employing the universe of juvenile court decisions in a US state between 1996 and 2012, we analyze the effects of emotional shocks associated with unexpected outcomes of football games played by a prominent college team in the state. We find that unexpected losses increase sentence lengths assigned by judges during the week following the game. Unexpected wins, or losses that were expected to be close contests ex ante have no impact. The effects of these emotional shocks are asymmetrically borne by black defendants. The impact of upset losses on sentence lengths is larger for defendants if their cases are handled by judges who received their bachelor’s degrees from the university with which the football team is affiliated.

Different falsification tests and a number of auxiliary analyses demonstrate the robustness of the findings. These results provide evidence for the impact of emotions in one domain on decisions in a completely unrelated domain among a uniformly highly educated group of individuals (judges) who make decisions after deliberation that involve high stakes (sentence lengths). They also point to the existence of a subtle and previously unnoticed capricious application of sentencing. (JEL D83, I23, J13, J15, K42, L83, Z21)

We investigate the existence of in-group bias (preferential treatment of one’s own group) in court decisions. Using the universe of juvenile-court cases in a US state between 1996 and 2012 and exploiting random assignment of juvenile defendants to judges, we find evidence for negative racial in-group bias in judicial decisions. All else being equal, black (white) juveniles who are randomly assigned to black (white) judges are more likely to be placed in custody, as opposed to being placed on probation, and they receive longer sentences. Although observed in experimental settings, this is the first empirical evidence of negative in-group bias based on a randomization design outside the lab. We provide explanations for this finding.

Before July 2009, salaries of the Members of the European Parliament (MEPs) were paid by their home country, and there were substantial salary differences between MEPs representing different countries. Starting in July 2009, salaries are pegged to 38.5% of a European Court judge’s salary, paid by the European Union. This created an exogenous change in salaries, the magnitude and direction of which varied substantially. Using information on each MEP between 2004 and 2011, we show that an increase in salaries decreases attendance at plenary sessions and reduces the number of questions asked but it has no impact on other job-related activities.

This paper investigates the extent of vengeful feelings and their determinants using data on more than 116,000 individuals from 66 countries. Country characteristics as well as personal attributes of the individuals influence vengeful feelings. The magnitude of vengeful feelings is greater for people in countries with low levels of education, low-income countries, and interrupted democracies. Personal education has an impact on vengeful feelings in lower-income countries. The results suggest that some puzzles about individual choice can best be explained by considering the interplay of personal and economic factors.

Recent theoretical models underscore the potential asymmetric response of various behaviors, ranging from criminal activity to smoking. In this paper, we use state-level panel and individual-level panel data to document the previously unnoticed asymmetric response of crime to changes in the unemployment rate. The results have policy implications, and they have potentially widespread ramifications because similar asymmetries may also be prevalent in other domains, ranging from the relationship between income and health to peer quality and student outcomes.

Being very attractive reduces a young adult’s propensity for criminal activity and being unattractive increases it. Being very attractive is also positively associated with wages and with adult vocabulary test scores, which implies that beauty may have an impact on human capital formation. The results suggest that a labor market penalty provides a direct incentive for unattractive individuals toward criminal activity. The level of beauty in high school is associated with criminal propensity seven to eight years later, which seems to be due to the impact of beauty in high school on human capital formation, although this avenue seems to be effective for females only.

A sizable literature has emerged recently to examine factors that impact the level of corruption across countries. For example, Ades and Di Tella (1999) found that corruption is higher in countries where domestic firms are sheltered from foreign competition. Graeff and Mehlkop (2003) documented the relationship between a country’s economic freedom and its level of corruption. Brunetti and Weder (2003) found that higher freedom of the press is associated with less corruption. Van Rijckeghem and Weder (2001) showed that the higher the ratio of government wages to manufacturing wages, the lower is corruption in a country.

This paper tests adverse selection in the market for child care. A unique data set containing quality measures of various characteristics of child care provided by 746 rooms in 400 centers, as well as the evaluation of the same attributes by 3,490 affiliated consumers (parents) in the U.S., is employed. Comparisons of consumer evaluations of quality to actual quality show that after adjusting for scale effects, parents are weakly rational. The hypothesis of strong rationality is rejected, indicating that parents do not utilize all available information in forming their assessment of quality. The results demonstrate the existence of information asymmetry and adverse selection in the market, which provide an explanation for low average quality in the U.S. child care market.

Using a nationally representative panel data set of U.S. high school students, this paper investigates the effect of gun availability at home on robbery, burglary, theft, and property damage for juveniles. Controlling for a very large number of personal and family characteristics and exploiting the time variation in criminal activity and gun availability, we show that gun availability at home is positively related to the propensity to commit crime for juveniles. It is unlikely that gun availability is merely a measure of the unobserved home environment because it does not influence other behaviors of juveniles such as drinking and fighting, being expelled from school, and having sex. No support is found for the hypothesis that gun availability decreases the propensity for being victimized.

This paper presents a dynamic model of criminal activity. Individuals are endowed with legal and criminal human capital. Potential incomes in legal and criminal sectors depend on the level of the relevant human capital, the rate of return and random shocks. Human capital can be enhanced by participating in both sectors. Legal human capital can also be enhanced through investment. Human capital is subject to depreciation. Individuals maximize expected discounted lifetime utility, which depends on consumption. The model allows analyses of the effects of recessions, imprisonment/rehabilitation scenarios, sanctions and returns to human capital. New insights, such as hysteresis in criminal behaviour, are obtained.

This paper investigates the effect of economic conditions (carrots) and sanctions (sticks) on murder, assault, robbery, burglary, motor vehicle theft, grand larceny, and rape in New York City, using monthly time-series data spanning 1974–99. Carrots are measured by the unemployment rate and the real minimum wage; sticks are measured by the number of felony arrests, size of the police force, and number of New York City residents in prison. In addition, the paper tests the validity of the “broken windows” hypothesis. Consistent with its implementation by the New York Police Department, we use misdemeanor arrests as a measure of broken-windows policing. The broken-windows hypothesis has validity in the case of robbery, motor vehicle theft, and grand larceny. While both economic and deterrence variables are important in explaining the decline in crime, the contribution of deterrence measures is larger than those of economic variables.

This paper uses a rich employer–employee matched data set to investigate the existence and the extent of nonprofit and part-time wage and compensation differentials in child care. The empirical strategy adjusts for workers’ self-selection into the for-profit or the nonprofit sector and into full-time or part-time work, as well as for unobserved worker heterogeneity, using a discrete factor model. We find differences between the regimes (full-time for-profit, full-time nonprofit, part-time for-profit, part-time nonprofit) in the manner in which human capital characteristics of the workers are rewarded. There is substantial variation in wages as a function of employee characteristics, and there is variation in wages within sectors. The results indicate that part-time jobs are good jobs in center-based child care, and there exist nonprofit wage and compensation premia, which support the property-rights hypothesis.

This paper merges a state-level panel data set that includes crime and deterrence measures and state characteristics with information on all death sentences handed out in the United States between 1977 and 1997. Because the exact month and year of each execution and removal from death row can be identified, they are matched with state-level criminal activity in the relevant time frame. Controlling for a variety of state characteristics, the paper investigates the impact of the execution rate, commutation and removal rates, homicide arrest rate, sentencing rate, imprisonment rate, and prison death rate on the rate of homicide. The results show that each additional execution decreases homicides by about five, and each additional commutation increases homicides by the same amount, while an additional removal from death row generates one additional murder. Executions, commutations, and removals have no impact on robberies, burglaries, assaults, or motor-vehicle thefts.

We use data from a sample of child care centers to estimate the relationships between cost and child care quality, and between revenue and quality. We use a measure of child care quality, designed by developmental psychologists, that is positively associated with child development. Taking the estimated cost-quality and revenue-quality relationships as given, we estimate the objective functions of firms and compute the quality supply function. The results indicate that the supply of quality is moderately elastic with respect to price and the wages of child care center workers. Implications of the results for child care policy are discussed.

Since Gary S. Becker's (1968) groundbreaking work on the economics of crime, economists have expanded upon both the theory and the empirical analysis of crime (e.g., Isaac Ehrlich, 1973; M. K. Block and J. M. Weineke, 1975; Ehrlich, 1975; Ann Dryden Witte, 1980). According to the standard theoretical framework, optimizing individuals engage in criminal activities depending upon the expected payoffs of the criminal activity, the return to legal labormarket activity, tastes, and the costs of criminal activity, such as those associated with apprehension, conviction, and punishment. Excellent reviews of the literature appear in Daniel Nagin (1978), Sharon Long and Witte (1981), Richard Freeman (1983), and Theodore G. Chiricos (1987). While some studies reported evidence that increases in criminal-justice sanctions recluce criminal activity (Ehrlich, 1975; Witte, 1980; Stephen K.Layson, 1985; Jeffrey Grogger, 199 1; Steven D. kevitt, 1997), others found either a weak relationship, or none at all between the two (Samuel L.Myers, Jr., 1983; James Peery Cover and Paul D. Thistle, 1988; Christopher Cornwell and William N. Trumbull, 1994).

This is the first study that decomposes unemployment into its structural and cyclical components and investigates their impact on income distribution, controlling for the influence of inflation. Increases in structural unemployment have a substantial aggravating impact on income inequality. Inflation has a progressive impact, which is due to the unexpected component. The study demonstrates that previous work failed to take into account the stochastic trend behavior of the variables. Consequently, specifications used by previous research cannot predict the behavior of income shares after 1983, whereas the specification used by this paper generates accurate forecasts. The results also indicate that a sustained GNP growth is not necessarily associated with an improvement in income inequality, because sustained GNP growth can coexist with increased structural unemployment.

In 1990, there were 27.6 million U.S. households with children under age 13, and in these households there were 47.7 million children. The primary child-care arrangement for 6.2 million of these children was center-based day care. Although most nonworking mothers care for their children themselves, nearly one out of every three nonworking mothers relies on center-based programs for 3-4-year-old children (Sandra Hofferth et al., 1991). The U.S. Department of Commerce reported that families with employed women spent an estimated $21 billion on child care in 1988, and women in poverty pay approximately 21 percent of their family income for child care (U.S. Department of Commerce, 1992).