Wednesday, December 29, 2010

Killing in L.A. drops to 1967 levels

LA Times article "Killing in L.A. drops to 1967 levels" (December 26th, 2010)" makes the common and unfortunate mistake of claiming, without cause, that crime rises during economic downturns.
Strikingly, homicides in the city have dropped by about one-third since 2007, the last full year before the economic downturn, according to a Times' analysis of coroner records.
It's unclear why a reasonable person would think that murders rise during bad economic times, beyond some primitive association of poverty and criminality. Certainly, all evidence is to the contrary. The graphs below show the trends in homicide rates over time (first in per capita rates, and second in per capita percentage changes in crime). Nothing in these trends supports the Time's "predictions that a bad economy would inexorably lead to higher crime."
(click to enlarge)

(click to enlarge)
In addition, a 2004 Journal of Economic Perspectives article written by University of Chicago economist Steven Levitt (available here) argues that the impact of macroeconomic variables on crime such as murder is theoretically ambiguous, and that violent crimes do not vary systematically with the unemployment rate. Pointing out how little "experts" seemed to know about crime trends, the article includes the following graph (re-printed without permission, click to enlarge), which could have served as a warning to the LA times.

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