Comments on Economic Behavioral Theory

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Comments on Economic Behavioral Theory

• Sally S. Simpson
• University of Maryland

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Overview

1. Economic Theory in Context A. Neoclassical
   Theory B. Rational Choice Theory in Criminology
   (Cornish Clarke, Paternoster, Nagin)
2. C. Lee-McCrary Behavioral Theory Model
3. Empirical Challenges to Behavioral Theory (L-M
   findings)
4. Theoretical Questions left to Answer

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Neoclassical Theory

• Core Assumptions
• Behavior is rational (subject to constraints).
• Actors hedonistic self-interested, motivation
  to offend is universal and ubiquitous.
• Individuals have identical preferences.
• Crime is risky behavior and risk, therefore,
  affects behavior.
• Core Propositions
• Crimedetermined by actual risks and benefits of
  behavior.
• Crime can be discouraged by raising its price.
• Cost is tied to punishment (certainty and/or
  severity)-- mere deterrence. Some attention to
  labor market losses.
• Focus
• --Primarily on property crimes (fewer
  incorporate index offenses).
• --Differences in behavior due to differences in
  choice sets.

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Weaknesses of Theory

• Static, did not explicitly take into account the
  relationship between future expectations and
  current decisions.
• Costs, theorized as formal punishment costs
  (justice system)stigmatic, attachment,
  commitment costs ignored.
• Assumed motivated offender.
• No role for social normseven though Bentham
  theorized differences in preferences as a
  consequence of education, family socialization,
  and other social forces.
• Scope claims are limited

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Criminology and rational choice theory.

• Crime as constrained choice (knowledge/information
  , individual differences).
• Different crimes, different opportunities,
  risks/benefits. Cannot assume models to be the
  same.
• Situations/context (structural) affect
  assessments which vary by crime type (corporate
  crime versus burglary).
• Norms affect preferences (morality/ethics). Do
  the right thing not out of self-interest
  (Etzioni)
• Costs broadened beyond formal justice system
  (informal) and benefits beyond pecuniary gain
  (thrill/excitement).
• Perceived versus objective costs.

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Lee-McCray Model

• Begin with standard economic model stochastic
  life-cycle framework. Thus, dynamic behavioral
  model.
• Actor chooses his/her pattern of participation to
  maximize expected utility from t forward under
  exponential discounting. Discounting varies
  patient offender, impatient offender, myopic
  offender (recognition of I-differences).
• Predict that juveniles will be deterred from
  offending after their 18th birthday because the
  cost of committing crime as an adult is
  substantially more severe and thus extracts a
  higher price.

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• Key assumption, all determinants of criminal
  behavior are evolving smoothly (i.e., only
  severity of sanctions adjusts at age 18 with
  greater sanction severity).
• Models to test this behavioral response use
  longitudinal person-level arrest data.
• Deterrence versus incapacitation effect.
• Results show that there was no significant drop
  in offending at age 18 (no support for
  deterrence).
• Rule out some potential confounds (subgroups and
  crime types), data flaws (not all of themthey
  are, after all, official arrest/incarceration
  data).
• Support incapacitation.

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Theoretical Implications of no effect findings.

• Why no effects? Authors give three ideas.
• 1. Actors lack knowledge about punishments or
  offenders behave irrationally.
• a. Lack of knowledge is consistent with extant
  theory through the constrained choice assumption.
  
• b. But if offenders behave irrationally, this
  challenges one of the main arguments of the
  theory and makes other theories of criminal
  behavior more attractive.

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Theoretical Implications cont.

• 2. Offenders are behaving rationally but they
  have extremely low discount factors (i.e., do not
  distinguish 2 years of prison from 20) and thus
  do not see the 18th birthday as a salient
  transition.
• a. This explanation is more consistent with
  low self-control theoryand thus poses a
  challenge to the traditional behaviorist theory .
  Theoretical integration of lscrc has been
  proposed (e.g., Piquero and associates).
• b. The explanation is consistent with
  economic/biological theory of Wilson and
  Herrnstein who argue even with those who have low
  self control and a taste for immediate
  gratification can be deterred when punishment
  severity is somehow made salient to the actor.
  Yet, L M are not optimistic this can be done.

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Theoretical Implications, continued.

• 3. Offenders have hyperbolic preferences (low
  short-run discount factors but more reasonable
  long-run discount factors)hence actors are
  myopic. Sentence differences are so small,
  offenders tend to see few differences between t
  and t1 punishments.
• a. Completely consistent with behavioral
  theory. This explanation is preferred by Lee and
  McCrary.
• b. One wonders, however, what other factors
  might be at work in this sample of youthful
  offenders that have not been incorporated into
  the behavioral model?

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Moving criminological theory forward More
questions

• Although Lee and McCrary theorize how an actors
  current experience/knowledge of sanctions should
  be affected as a consequence of a justice
  system transition, is it fully a dynamic theory
  in the sense that it takes into account how
  criminal and legitimate opportunities expected to
  prevail in the future affect current decisions
  about criminal activity (Flinn, 1986).
• How does the relationship between criminal and
  legitimate opportunities change over time as
  criminal and/or social capital increase/decrease
  and why? For instance, Uggan notes that job
  opportunities become salient for high rate
  offenders when they reach their mid to late 20s,
  but not before. It doesnt seem reasonable that
  the monetarized return from legitimate work has
  increased to such a point--for these usually
  unemployed high frequency offenders--that it now
  exceeds the monetarized return from criminal
  activity (thus making crime less attractive).

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Moving theory forward.

• The theory seems able to incorporate Individual
  differences such as knowledge, experience, IQ,
  and so forth but these components are not
  generally captured in the simplistic
  expected-utility-maximization principle versions
  of the theory.
• Where are the social norms and values and what
  role should they (or could they) plan in the
  behaviorist model?
• Socialization influences (peers, gangs, violent
  people and places) and psychic thrills (positive
  and negative)?
• Why dont situational contingencies play a larger
  role (motivations)?
• Social/criminal capital as it affects
  preferences?
• ---I see the economics in rational choice
  theory, but where is the criminology in these
  behavioral theories?