Street Crime

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Gerald R. Ford School Of Public Policy, University Of Michigan

National Poverty Center Working Paper Series
#03-3
May 2003

Street Crime and Street Culture
Dan Silverman, Department of Economics, University of Michigan.

This paper is available online at the National Poverty Center Working Paper Series index at: http://www.npc.umich.edu/publications/working_papers/

Any opinions, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the view of the National Poverty Center or any sponsoring agency.

Street Crime and Street Culture∗
Dan Silverman Department of Economics University of Michigan† May 2003

Abstract A model of social interactions shows why and when reputation concerns may support an ‘underclass’ culture of street crime where the incentives for such behavior are otherwise weak. Those who do not gain from street crime directly nevertheless find it optimal to invest in violence and thereby build a reputation that will earn them deference from the rest of the community. Even when the fraction of the population with a direct interest in street crime is small a larger proportion may necessarily participate in violence in pursuit of reputation. The model reveals a welfare tradeoff between the gains from information revelation and the costs of reputation-based violence. The model also shows how the social structure of a community interacts with local returns to crime to determine the value of a street reputation and therefore street crime. (JEL D80, Z10, L14)



I thank Elijah Anderson, Luis Araujo, Jan Eeckhout, Hanming Fang, Johannes Hörner, Justin Johnson, Antonio

Merlo, Olivia Mitchell, Ted O’Donoghue, Nicola Persico, Lones Smith and especially George Mailath and Andrew Postlewaite for many helpful comments and discussions. I gratefully acknowledge financial support from the Social Science Research Council. †

319 Lorch Hall, 611 Tappan St., Ann Arbor, MI 48109-1220. Email: dansilv@umich.edu

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Introduction
Why are the rates of street crimes such as robbery and assault so high, especially in areas of

concentrated poverty? Why, in particular, are the young, poor, and able-bodied so often their own victims? If criminals have a choice among victims and crimes, the basic economic incentives would seem to point towards those who have more to steal and away from such violent and visible methods of expropriation. A growing literature argues that direct economic incentives provide incomplete explanations for the extent and types of crime among the young and poor, and that criminal behavior is marked by social interactions. This literature suggests that social forces generate cultures or norms of street violence in some communities, and that the same social forces may support other ‘underclass’ norms with respect to education, fertility, family structure, and preventable disease.1 A prominent set of these social theories argues that high rates of crime among the young and poor may be attributed to a ‘culture of poverty.’ (See, e.g., Wilson and Herrnstein, 1985, and Bennett, et al., 1996.) According to this view, young residents of poor, high-crime neighborhoods often lack the values that would imply violence is undesirable. From the culture of poverty perspective, socialization spreads preferences among the poor, in particular a tendency towards myopia or impulsiveness, that support socially sub-optimal behavior such as street crime. This paper offers an alternative theory of how a social force, namely reputation, may account for ‘underclass’ behavior with respect to street crime. Founded in ethnographic evidence, the theory explains how reputation concerns may draw those who are patiently forward-looking, and who expect no direct gain from street crime, to nevertheless adhere to a culture of violence. In the development of this theory, the paper also shows how the ability to generate street reputations presents a...
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