Roberto Galbiati

The Deterrent Effects of Prison: Evidence from a Natural Experiment

The Collective Clemency Bill passed by the Italian Parliament in July 2006 represents a natural experiment to analyze the behavioral response of individuals to an exogenous manipulation of prison sentences. On the basis of a unique data set on the postrelease behavior of former inmates, we find that 1 month less time served in prison commuted into 1 month more in expected sentence for future crimes reduces the probability of recidivism by 0.16 percentage points. From this result we estimate an elasticity of average recidivism with respect to the expected punishment equal to −0.74 for a 7‐month period.

Crime in Europe and the United States: Dissecting the ‘Reversal of Misfortunes’

Contrary to common perceptions, today both property and violent crimes (with the exception of homicides) are more widespread in Europe than in the United States, while the opposite was true thirty years ago. We label this fact as the ‘reversal of misfortunes’. We investigate what accounts for the reversal by studying the causal impact of demographic changes, incarceration, abortion, unemployment and immigration on crime. For this we use time series data (1970-2008) from seven European countries and the United States. We find that the demographic structure of the population and the incarceration rate are important determinants of crime. Our results suggest that a tougher incarceration policy may be an effective way to contrast crime in Europe. Our analysis does not provide information on how incarceration policy should be made tougher nor does it provide an answer to the question whether such a policy would also be efficient from a cost‐benefit point of view. We leave this to future research.

Stealing to Survive: Crime and Income Shocks in 19th Century France

Using local administrative data from 1826 to 1936, we document the evolution of crime rates in 19th century France and we estimate the impact of a negative income shock on crime. Our identification strategy exploits the phylloxera crisis. Between 1863 and 1890, phylloxera destroyed about 40% of French vineyards. We use the geographical variation in the timing of this shock to identify its impact on property and violent crime rates, as well as minor offences. Our estimates suggest that the phylloxera crisis caused a substantial increase in property crime rates and a significant decrease in violent crimes.

Can sanctions induce pessimism? An experiment

We run an experiment in which two subjects play a two-round minimum effort game in the presence of a third player (principal) who is the only one informed about past effort choices and benefits from a higher minimum effort of the others. Sanctions introduced in the second round by the experimenter lead to more optimistic beliefs and higher efforts. This is not true when sanctions have been imposed by the principal. The possibility that the choice of a sanction is a signal of low effort levels causes players who chose high effort in the first round to be less optimistic.

Response of Crime to Unemployment An International Comparison

This article studies crime rates’ response to economic conditions. Using a longitudinal data set covering about 20 countries over the period 1970-2010, we investigate whether crime rates respond asymmetrically to increases in unemployment and recoveries in economic conditions. We find a positive response of crime rates on variation in unemployment rates, but we do not find compelling evidence of asymmetric responses to positive and negative variations in the economic cycle.

Behavioural Effects of Obligations

How formal rules affect human behaviour is a crucial issue in economics. Formal rules are defined as obligations backed by incentives. The economic literature has largely focused on the role of incentives in shaping individual behaviour, Yet, the role of obligations, i.e. what formal rules ask people to do or not to do, has been largely ignored. In this paper we run a public good game experiment to analyze the bahavioural effects of obligations. We find evidence that obligations can affect cooperative bahaviour both by coordinating conditional cooperators beliefs about others behaviour and by directly affecting preferences for cooperations. Our results shed a new light on the behavioural channels through which formal rules can affect individual behaviour. These findings suggest the opportunity to broaden the scope of analysis in order to again a better understanding of the effects of institutions on economic outcomes.

Deterrence and Information: The Optimal Use of Monetary and Nonmonetary Sanctions Revisited

It is a widely accepted conclusion of the economic literature on deterrence that nonmonetary sanctions should be introduced only when monetary fines have been used up to their maximum extent. However, this conclusion is at odds with what is commonly observed e.g. in the case of deterrence of driving offenses, where nonmonetary sanctions such as licence suspension or vehicle withdrawal are extensively used, even though it would be possible to apply a monetary sanction of equivalent value. In this paper it is shown that when the sanctioning policy conveys information about the riskiness of the sanctioned behavior, the conclusion about the optimal use of nonmonetary sanctions may be different. Namely, the use of nonmonetary sanctions can be optimal even though the monetary fine is not maximal. The argument is formalized in a model with rational though uninformed individuals, who know that the enforcer has superior information about the riskiness of action but are uncertain about the true objectives of the enforcer.