Life in High Poverty Neighborhoods

1. Life in High Poverty Neighborhoods

2. High Poverty Neighborhoods • Canada – Fist, Stick, Gun, Knife • Another ethnographic piece. • What do we learn? Interesting passages? • How do violent street norms get perpetuated?

3. High Poverty Neighborhoods • Massey “Getting Away with Murder…” • What are his main points?

4. High Poverty Neighborhoods He considers a “city” with a population that is 25% black and the poverty rate for whites is 10%. Neighborhood Poverty Rate for Average Poor Black Person Without Class Segregation Racially Integrated City Black Pov Rate 20% 12.5% Black Pov Rate 30% 15% Racially Segregated City Black Pov Rate 20% 20% Black Pov Rate 30% 30% With Class Segregation Racially Integrated City Black Pov Rate 20% 25% Black Pov Rate 30% 30% Racially Segregated City Black Pov Rate 20% 40% Black Pov Rate 30% 60%

5. High Poverty Neighborhoods • Massey • Focuses on relation between violent crime and segregation. • “Because crime and violence are strongly correlated with income deprivation, any social process that concentrates poverty also concentrates crime and violence to create an ecological niche characterized by a high risk of physical injury, violent death, and criminal victimization.” • So greater economic and racial segregation almost surely lead to greater concentration of crime, but will it lead to more overall crime? Why?

6. High Poverty Neighborhoods “In a social world characterized by endemic, exogenously induced violence, therefore, violent behavior and an obsessive concern with respect become rational strategies for survival. Given a geographic concentration of violence, some community members are sure to adopt violent attitudes and violent behavior as survival strategies. As more people adopt more violent strategies for self-preservation, the average level of violence within the niche rises, leading others to adopt more violent behavior. As the average level of violence rises over time, more people adopt increasingly violent strategies to protect themselves from the growing threat of victimization, ultimately producing a self-perpetuating upward spiral of crime and violence.” (Massey, p1216)

7. High Poverty Neighborhoods • Thieves, Thugs, and Neighborhood Poverty (2010) • My attempt to model the explicit interactions between violence and poverty. • Focus is on modeling the mechanism through which both individual and neighborhood poverty may influence criminal behavior, and how violent crimes may differ from more basic property crimes. • Basic Idea • “I don’t care if I got money, or work Monday through Friday. I just go shoot a motherf*#@er on the weekends. If that’s what need to be done to keep my hood and my young ones around here safe, then that’s what to get done.” –resident of Nickerson Gardens housing project on Los Angeles’ south side. • This is a “simplified” version of the model in the paper.

8. Model of Segregation and Crime Model – Basic Environment • A community made up of many individuals who: • Each live in a distinct neighborhood within larger community. • Have either: • (i)high legal income (m=$75k available for consumption each period) • (ii) low legal income (m=$10k available for consumption each period) • Value dollars of consumption (m) via a utility function u(m) = m0.5 • So each person gets diminishing marginal utility in dollars of consumption • What does this mean about the marginal utility of a little more money between individuals with different legal income?

9. Model of Segregation and Crime Picture

10. Model of Segregation and Crime Participation in Basic Property Crime • By being a thief in a given period, an individual i: • Adds $2k of additional consumption that period beyond his income. • But by being a thief, a person must also pay a utility cost ε (disutility from guilt, possible jail sentence, etc.). But, suppose not everyone pays the same cost to being a thief. • Cost to High criminal propensity is ε =5 • Cost to Low criminal propensity person is ε =10 • Suppose each type makes up half the population and criminal propensity is uncorrelated with legal income. • So utility for individual i from being: • a thief is UT = (mi + 2000)0.5 – εi • a law-abider UL = (mi )0.5

11. Model of Segregation and Crime Participation in Basic Property Crime • So an individual i becomes a thief if u(mi + 2000) - εi ≥ u(mi), or u(mi + 2000) - u(mi) ≥ εi • Consider people living in particular neighborhood with poverty rate λ. • What fraction of poor become a thief? • What fraction of rich become a thief? • What fraction of whole neighborhood will become thieves? • What depends on neighborhood poverty rate λ?

12. Model of Segregation and Crime Intuition: consider picture again.

13. Model of Segregation and Crime (cont.) Participation in Interpersonal Violent Crime • Individuals encounter neighbors at a rate of one per period. • At a given point in time, each individual decides to become either: • Law-abider – acts passively when encountering neighbors. • Thug – attacks any neighbors he encounters. • Law-abider / Law-abider – both act passively • Neither's payoffs are affected. • Law-abider /Thug – Thug attacks, pacifist acts passively • Thug takes $2k from pacifist and pacifist incurs pain cost of 1 unit of utility • Thug/Thug – both attack • No money changes hands, both thugs incur pain cost of 1 unit of utility. • And again assume there is a utility cost ε to being a thug. • Cost to High criminal propensity is ε =5 • Cost to Low criminal propensity person is ε =10 • Again suppose each type makes up half the population and criminal propensity is uncorrelated with legal income.

14. Model of Segregation and Crime (cont.) Interpersonal Violent Crime (cont.) • Who becomes a thug? What all does it depend on? • Consider an individual i with income mi • Suppose he chose to be a thug. • What would be his utility if he encounters another thug? • What would be his utility if he encounters a law-abider? • So on average what would be his utility? • Now suppose he chose to be a law-abider. On average what would be his utility? • So what equation determines who becomes a thug?

15. Model of Segregation and Crime (cont.) Interpersonal Violent Crime (cont.) Become thug if: or So in this model, why do individuals become thugs and what are key determinants of who chooses to do so?

16. Model of Segregation and Crime (cont.) • Picture

17. Model of Segregation and Crime (cont.) Interpersonal Violent Crime (cont.) • So who becomes a thug? • Homework will be to determine who becomes a thug under different beliefs about what fraction of neighbors choose to be thugs. • What is an equilibrium in this context?

18. Model of Segregation and Crime (cont.) Interpersonal Violent Crime (cont.) • Basic Intuition: • Individuals expect poorer neighborhoods to have more thugs (why?) • The opportunity cost of not being a thug when facing a law-abider or a thug will be greater for poor than non-poor. • Individuals have a greater likelihood to become thugs if there are lots of poor people in their neighborhood (Why?). • For both income types, being a law-abider will be more expensive when they encounter thugs than when they encounter law-abiders (i.e. defensive motivation greater than offensive motivation) • This greater likelihood is more pronounced for poor than non-poor (Why?) • Diff between cost of being a law-abider when encountering a law-abider vs. cost of being a pacifist when encountering a thug greater for poor than non-poor.

19. Model of Segregation and Crime (cont.) • Therefore, the expected decrease in violent criminality associated with moving some non-poor individuals from poorer neighborhood to richer is more than offset by the expected increase in violent criminality associated with moving poor individuals from richer neighborhood to poorer. • So, all else equal, greater income segregation should lead to more overall violent crime. • So, what we want to test is whether, all else equal, are citywide violent crime rates higher when a city is more economically segregated. • How might we go about testing this? What might be the difficulties?

20. Model of Segregation and Crime (cont.) Basic Idea: We want to compare cities that are alike on almost all fronts, but due to some quasi-random reason some are more prone to higher rates of income segregation than others. In other words, we want to find something about cities that is correlated with income segregation but not directly related to current crime conditions. Such a thing is often called an “instrument”. What might be a valid instrument in this context?

21. Segregation and Crime

22. Segregation and Crime

23. High Poverty Neighborhoods as a Developing Country • Sudhir Venkatesh, “Gang Leader for a Day” • What are some notable passages? • Why might I say a high poverty neighborhood is like a developing country?

24. High Poverty Neighborhoods as a Developing Country • What is meant by the culture of poverty? • What is the structural versus behavioral debate? • Why does it matter?

25. High Poverty Neighborhoods as a Developing Country • In early 1990s almost 1/3 of Mexico considered poor by the World Bank Standard. • Only real poverty programs were food assistance based. • President Ernesto Zedillo asked one of his finance ministers, Santiago Levy, to think about new ways of helping the poor.

26. High Poverty Neighborhoods as a Developing Country • Opportunidades • Started in 1997 as an innovative anti-poverty progam. • How does program work? What is the philosophy behind it? • What were some of the steps taken to help target the money and minimize corruption?

27. High Poverty Neighborhoods as a Developing Country • Opportunidades (cont.) • Set up as a randomized treatment and control study, which has allowed for plausible evaluation as well as better tailoring of the program. • Program appears to have lead to huge gains in education and nutrition for poorest people. • In decade since program introduced, overall poverty has been halved. • What is one of big concerns about the program?

28. High Poverty Neighborhoods as a Developing Country • Opportunities NYC • Can importing this type of program to poor areas in developed countries like the U.S. work? • What do critics say? Is this justified? • What makes U.S. different?

29. High Poverty Neighborhoods as a Developing Country • Opportunities NYC • Payments made for: • Attending school 95% of the time ($25-$50/month) • Earning enough credits per year to graduate on time ($600) • Passing standardized tests ($300-$600)

30. High Poverty Neighborhoods as a Developing Country • Opportunities NYC

31. High Poverty Neighborhoods as a Developing Country • Opportunities NYC • Conclusions • Program seemed to have affected behavior (a little) • Not all capable students were reaching potential without incentives (e.g. those “academically prepared”) • Program was not sufficient to affect outcomes who were already behind (“academically unprepared”)