Bruce L. Benson

Integration of Spatial Markets

Studies of spatial market integration draw their implications from a theory which assumes that there are no intraregional transport costs. An alternative theory is offered, based on the assumptions that buyers and sellers are spatially dispersed and intraregional transport costs are significant. This implies that the market is a linked oligopoly (or oligopsony) and that market integration tests are tests of alternative oligopoly price formation processes. For example, collusive basing-point pricing produces results typically assumed to imply efficiently integrated markets, while competitive FOB pricing does not. The theoretical implications are illustrated with an analysis of hog prices in Canada.

Is property crime caused by drug use or by drug enforcement policy

The relationships among drug offenses, prorperty crime, and the allocation of police resources are investigated in a structural model using data from Florida countries. Law enforcement resources are scarce, and as efforts to combat drug crime increase the amount of these resources allocated to property crime is reduced. This reallocation of police resources results in reduced deterrence for property crime and, as a result, an increase in these crimes. The evidence presented suggests that rising property crimes in Florida are at least partially the result of drug enforcement policy.

BEER TAXATION AND ALCOHOL-RELATED TRAFFIC FATALITIES

Most studies of alcohol-related traffic fatalities find beer taxes to be an important policy variable. This is surprising since beer taxes only have a small impact on consumption and heavy drinkers are the least responsive to prices. This study shows that the tax relationship is not robust across data periods and that it reflects missing variable biases. While lack of control for law enforcement effort does not appear to bias tax coefficients, failure to include determinants of alcohol consumption other than taxes and drinking age and/or factors that simultaneously determine drinking behavior and political support for alcohol taxes apparently do.

Deterrence and Public Policy: Trade-Offs in the Allocation of Police Resources

A large econometric literature has tested the implications of Becker’s (1968) pathbreaking article on the economics of crime. This literature typically focuses on a supply of crime-specific offenses, hypothesizing that the crime rate is related to the probability and severity of punishment for the crime, the expected benefits from the criminal activity, returns from alternative legal activities, and other socioeconomic factors. Many studies conclude that criminal behavior can be deterred by public sector law enforcement efforts. Critics such as Cameron (1988) and Brier and Fienberg (1980) have exposed apparent inconsistencies between the theoretical analysis and the empirical findings, however. For example, they emphasize that many studies use various aggregate measures of police resources in equations intended to explain crime rates, only to find either no relationship or a significant positive relationship. Such critics also note that whereas crime rates are generally negatively related to the probability of arrest using simultaneous equation estimators, the probability of arrest often does not seem to be significantly related to the level of police resources. The failure of measures of police

Police bureaucracies, their incentives, and the war on drugs

After 1984 local law enforcement agences in the U.S. substantially increased arrests for drug offenses relative to arrests for property and violent crimes. This paper explores why this reallocation of police resources occurred, focusing on alternative “public interest” and bureaucratic self interest explanations. The Comprehensive Crime Act of 1984 is shown to have altered the incentives of police agencies by allowing them to keep the proceeds of assets forfeited as a result of drug enforcement activities. Empirical evidence is presented which shows that police agencies can increase their discretionary budgets through the asset forfeiture process.

An Alternative View of Pricing in Retail Food Markets

The pricing mechanism of intracity retail food markets has received the attention of agricultural economists who are interested in the competitive nature of food price determination. Attention has focused on the information-theory paradigm and potential impact of publically available comparative price reports. In this paper, a spatial economic model is developed to describe and analyze consumer choice, seller behavior, and price determination in retail food markets. Empirical evidence is then used to test hypotheses developed from the spatial model. It is concluded that the spatial model offers added explanatory power of observed food market responses to retail price reporting.

Deterring drunk driving fatalities: An economics of crime perspective

Econometric studies of public policies that might deter driving-under-the-influence (DUI) offenses generally adopt, either explicitly or implicitly, the basic framework provided in Beckers (1968) expected utility model of crime behavior. Yet many of the DUI studies suggest that neither the probability of conviction nor the severity of punishment are effective deterrents to drunk driving. In fact, the variables which tend to have the strongest deterrent effects in econometric studies of crime are not estimated in most DUI studies.

Entrepreneurial police and drug enforcement policy

The hypothesis that drug enforcementis relatively high in local jurisdictions where statelaws dictate that police retain seized assets istested in the context of a reduced-form equation ofthe supply and demand for drug enforcement. Theresults are robust across model specifications, someof which directly control for the level of drug use:legislation permitting police to keep seized assetsraises drug arrests as a portion of total arrests byabout 20 percent and drug arrest rates by about 18percent. Police bureaucrats apparently desirediscretionary budget increases, and they haveconsiderable discretion in determining resourceallocation.

An Economic Theory of the Evolution of Governance and the Emergence of the State

Individuals desires to expand wealth in the face of scarcity underlie the evolution of rules and institutions of governance, as individuals attempt to reduce the transactions costs that impede coordination and motivation in an uncertain world. Some wealth-seeking individuals have or develop comparative advantages in violence, however, and behavioral rules and governing institutions may evolve to coordinate joint production of extortion too. The process by which such institutions evolve into a state is discussed. To illustrate the plausibility of this theory, various historical and modern state and non-state governance institutions are shown to be consistent with it.

The Impact of Drug Enforcement on Crime: An Investigation of the Opportunity Cost of Police Resources

The conventional wisdom among the law enforcement community is that drug use causes crime and that stringent enforcement of drug laws is an effective tool to combat property and violent crime. Previous research by some of these authors found that a sharp increase in drug enforcement in Florida during 1984–1989 resulted in a reallocation of police resources which reduced the effectiveness of property crime enforcement and increased the property crime rate. Some have suspected that this result is the product of the very large increase in drug enforcement during this time period and that under “normal” circumstances greater drug enforcement would not result in higher property crime. This paper rebuts that suspicion.