Gregory N. Price

Crime and punishment : And skin hue too?

This paper considers whether the disadvantages that accrue to black Americans with a dark skin hue also induce a transition into criminal activity—an outcome consistent with standard economic models of crime. We also examine whether or not prison terms are conditioned on skin hue. With data on black offenders in the state of Mississippi, we estimate Cox proportional hazard specifications of the transition into criminal activity, and find that it is conditioned on the darkness of skin hue. Our parameter estimates are consistent with a theoretical framework in which being black and having a dark skin hue induces a transition into criminal activity by limiting the set of legitimate opportunities for an individual. Given a conviction, we also find that the severity of punishment for black offenders as measured by the length of sentence is an increasing function of the darkness of skin hue. JEL Classification: J0, J7, K4, Z0 ∗Professor and Chair, Department of Economics, College of Business Administration, 4202 E. Fowler Ave, BSN 3403, Tampa, Florida 33620–5500, email: kgyimah@coba.usf.edu, Tel # (813) 974-6520, ∗∗Corresponding Author: Director, Mississippi Urban Research Center, Jackson State University, P.O. Box 17309, Jackson Mississippi, 39217, email: gprice@murc.org, Tel #: (601), 979-1428. This paper was prepared for presentation at the Annual Meeting of the Allied Social Science Association, joint AEA/NEA paper session on “Skin Tone Discrimination and Economic Outcomes”, January 7, 2006 in Boston, Massachusetts. Conditional on being black there is evidence that skin hue matters for a wide array of socioeconomic outcomes. For example, relative to blacks with a light skin hue, there is evidence that blacks with a dark skin hue fare worse in terms of wages (Goldsmith, Hamilton and Darity, 2005), occupational prestige (Hill, 2000), unemployment ( Hunter, Allen and Telles, 2001), access to health resources (Bodenhorn, 2002), and intergenerational wealth accumulation (Bodenhorn, 2003). Such findings suggest that the distribution of advantage and disadvantage in American life is conditioned not just on being black, but given that one is black, skin hue as well. That skin hue conditions economic outcomes for blacks suggests that profit maximizing firms and utility maximizing individuals optimize across a preference for blacks with light skin hues (Goldsmith, Hamilton and Darity, 2005). If so, the distribution of disadvantage among blacks will fall along a continuum of gradations in skin hue, with disadvantage increasing with respect to the darkness of skin hue. One possible manifestation of disadvantage is crime. In the canonical economic model of crime of Becker (1968) and as extended by Ehrlich (1973), disadvantaged individuals can be viewed as those with constrained opportunities for engaging in legitimate activities, relative to illegitimate activities. To the extent that conditional on being black, opportunities for engaging in legitimate activities are inversely proportional to the darkness of skin hue, the probability of participating in illegitimate activities—crime—may also be conditioned on skin hue. Despite the apparent importance of skin hue in the distribution of advantage and disadvantage, the economics of crime literature tends to view blacks as one homogeneous group. To the extent that skin hue matters, aggregating across black Americans in this manner could lead to biased estimates of the effects of being black on participation in criminal activity, and to inferences that being black is associated with higher stocks of “criminal capital” relative to non-blacks. However, given that race and skin hue determine the distribution of disadvantage among black Americans, the effects of being black on criminal activity may instead reflect the disadvantages that accrue to being black conditional on skin hue. In this paper we consider the effects of skin hue both on the likelihood of participation in criminal activities, and on sentencing for black Americans conditional on being convicted for crime. To the extent that individuals, firms and social institutions optimize across preferences for blacks with a light skin hue, it is plausible that blacks with a dark skin hue face, relative to those with a light skin hue, constraints on opportunities for legitimate activities that motivate illegitimate activities and once arrested, are punished more severely than black offenders with a light skin hue. See for example Ehrlich (1973) and Gyimah-Brempong (1997). The only evidence that we are aware of that links skin hue among blacks with criminal justice issues is that provided by Johnson, Farrell and Stoloff (2000). They found that among black men with prior criminal records in Los Angeles, the jobless rate for those with a dark skin hue was 54 percent—in contrast to 41.7 for those with a light skin hue.

The Relative Returns to Graduating from a Historically Black College/University: Propensity Score Matching Estimates from the National Survey of Black Americans

This paper considers the returns to earning a baccalaureate degree from a Historically Black College/University (HBCU) relative to a non-HBCU for black Americans. With data from the National Survey of Black Americans, we use propensity score matching estimators to estimate the treatment effect of graduating from an HBCU on direct labor market outcomes, and on psychological outcomes that indirectly increase wages. We find that the treatment effect of graduating from an HBCU relative to a non-HBCU is positive with respect to labor market and psychological outcomes across three decades. As our direct labor market outcome measure reflects permanent earnings, our results suggest that as HBCUs afford graduates relatively superior long-run returns they continue to have a compelling educational justification, as the labor market outcomes of their graduates are superior to what they would have been had they graduated from a non-HBCU.

Does regional currency integration ameliorate global macroeconomic shocks in sub-Saharan Africa? The case of the 2008-2009 global financial crisis

Purpose - – The purpose of this paper is to consider whether regional currency integration in sub-Saharan Africa ameliorates global macroeconomic shocks by considering the impact of the 2008-2009 global financial crisis on economic growth. This suggests that Central Africa Franc Zone (CFAZ) eurocurrency union membership amplifies the effects of global business cycles in sub-Saharan Africa. Design/methodology/approach - – The authors estimate the parameters of a quantity theory model of economic growth within a Generalized Estimating Equation (GEE) Framework. Findings - – Parameter estimates from GEE specifications reveal that the contraction in credit during the financial crisis of 2008-2009 had larger adverse growth effects on sub-Saharan African countries who were members of the CFAZ eurocurrency union. The authors also find that sub-Saharan African countries who were members of the CFAZ eurocurrency union were more likely to experience a contraction in credit. Originality/value - – As far as the authors can discern, no existing empirical growth models use a GEE framework to estimate parameters of interest. The GEE parameter estimates are distribution-free, robust with respect to unknown forms of heteroskedasticity, and control for a wide variety of error structures that can induce bias in panel data parameter estimates.

Hurricane Katrina: Was There a Political Economy of Death?:

An empirical implication of egalitarianism in the provision of public disaster relief services is that the probability of surviving a natural disaster should not be conditioned on a household’s position in the income distribution, or its racial characteristics. In this paper, we utilize data on deaths attributed to Hurricane Katrina in the City of New Orleans to estimate a political economy model of the public provision of disaster rescue services. Parameter estimates reveal that the probability of dying as a result of Hurricane Katrina, at both the census tract and individual level, increased with respect to being black and poor. Our results suggest that there was a departure from egalitarian principles in the provision of public disaster rescue services during Hurricane Katrina, and are consistent with a political economy of race and class governing decisions about the allocation of public resources to ameliorate population environmental risks.

Economics Faculty Research at Teaching Institutions: Are Historically Black Colleges Different?

This paper examines the difference in research output of economics departments at historically black colleges and universities (HBCUs) and non-HBCUs that are teaching institutions. We also examine the causal relationship between economics faculty research and the number of an institution’s baccalaureate graduates who earn doctorates in economics. Our findings suggest that economics departments at HBCUs produce less research output relative to non-HBCUs. However, research output is equally effective in producing economics doctorates at both types of institutions. These findings suggest that a plausible way to increase the stock of black Ph.D. economists is to increase economics research at HBCUs.

Remittances and the Financing of Terrorism In Sub-Saharan Africa: 1974 - 2006

Abstract Remittances have been recognized as an important determinant of economic growth for Sub-Saharan African economies as they can finance other determinants that constitute drivers of growth. To the extent that remittances finance terrorism, they can also inhibit economic growth as terrorism can constrain important drivers of growth such as investment and consumption expenditures. In this paper, we appeal to a theory of rational terrorism and consider whether remittances to Sub-Saharan Africa finance terrorism. We estimate the parameters of a static and dynamic terrorism incident supply function with maximum likelihood and Generalized Estimating Equation count data estimators for Sub-Saharan Africa between 1974 and 2006. Our parameter estimates suggest that for Sub-Saharan Africa, remittances are a source of finance for terrorism. We find that approximately one terrorism incident is financed in Sub-Saharan Africa for remittance inflows that range between approximately one quarter of a million dollars and one million dollars.

The economics of race and eugenic sterilization in North Carolina: 1958-1968

Theoretical justifications for state-sanctioned sterilization of individuals provided by Irving Fisher rationalized its racialization on grounds that certain non-white racial groups, particularly blacks due to their dysgenic biological and behavioral traits, retarded economic growth and should be bred out of existence. Fishers rationale suggests that national or state level eugenic policies that sterilized the so-called biological and genetically unfit could have been racist in both design and effect by disproportionately targeting black Americans. We empirically explore this with data on eugenic sterilizations in the State of North Carolina between 1958 and 1968. Count data parameter estimates from a cross-county population allocation model of sterilization reveal that the probability of non-institutional and total sterilizations increased with a countys black population share-an effect not found for any other racial group in the population. Our results suggest that in North Carolina, eugenic sterilization policies were racially biased and genocidal.

The determinants of entry for black-owned commercial banks

To date, no empirical account exists that explains the entry of Black-owned Commercial Banks (BCBs). This study reports an analysis based on a cross-section of banking markets in which entry is treated as a discrete variable with a Poisson distribution. Estimation of a Poisson probability model shows that for a given market BCB entry is determined by the size of the Black population, deposit market concentration, and the growth rate of U.S. government deposits.

Race, Trust in Government, and Self-Employment

This paper examines the effects of trust in government on the self-employment decision. For black Americans the decision to be self-employed, and the associated returns are likely to be particularly sensitive to trust in the federal government, as the history and political economy of race in the United States required federal government to introduce laws, legislation and institutions to alter the future behavior of whites in their market interactions with blacks. Utilizing General Social Survey Data, I find that among the self-employed, race—being black—is a negative determinant of various measures of trust and confidence in federal government. Parameter estimates from a Bivariate Probit estimator of the likelihood of black self-employment and income reveal that both increase with respect to several measures of trust and confidence in the federal government. The results suggest that as the relative growth and performance of black self-employment is trust and confidence sensitive, the underrepresentation of black-owned firms can possibly be explained by the relatively low trust and confidence in the federal government among black Americans.

The Causal Effects of Participation in the American Economic Association Summer Minority Program

This article examines whether participation by underrepresented minority groups in the American Economics Association Summer Minority Program (AEASMP) has causal effects on outcomes associated with success as academic economists. We estimate both propensity score weighted and Heckit parameter estimates of (1) the average effect of treatment and (2) the effect of treatment on the treated. Our results, which vary across specifications of potential outcomes and propensity score truncated samples, suggest that AEASMP participation by black American Ph.D. economists has a positive and causal impact on 4 outcomes associated with success as an academic economist. However if the probability of selection into the treatment by the nontreated is similar to that of the treated, the results suggest that AEASMP participation by black American Ph.D. economists has a positive and causal effect on research productivity and in gaining access to research funding.