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Economics 160

Economics 160. Lecture 16 Professor Votey Decision Theory: Jury Trials, Fair to Whom ?. Votey, Lecture 8, Notes , p. 121 Syllabus XVI. More on the role of Decision Theory the Economic Paradigm (in part review). Who uses it and why?

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Economics 160

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  1. Economics 160 Lecture 16 Professor Votey Decision Theory: Jury Trials, Fair to Whom ? Votey, Lecture 8, Notes, p. 121 Syllabus XVI

  2. More on the role of Decision Theory the Economic Paradigm (in part review) • Who uses it and why? • 1. Criminal participants -following basic Bentham / Utilitarian theory • 2. Society in response - with efforts at crime control • 2 sets of actors on opposing sides of the problem • Why do rational people commit crime? • 1.Because it pays - though the individual may be making the best of a poor set of options • 2. Most criminals are making a choice • - the legitimate alternative appears worse

  3. Behavior of the individual On what basis does the individual make a choice? Success: Job:$X Legitimate Job Unempl: $0 Failure: CHOICE Jail: D days @ $Z loss Crime The Key: Success: Take from crime $Y Expected Net Benefits = E(NB) = P(B) . $B - P(C) . $C needs to be calculated for each option, i.e., E(NB) = [(1 - P(U)).$X + P(U).0] vs. [(1 - P(A)).$Y + P(A).(-$Z)] Simply pick the “Best”

  4. Behavior of the individual On what basis does the individual make a choice? Success: Job: $X Legitimate Job Unempl: $0 Failure: CHOICE Jail: D days @ $Z loss Crime The Key: Success: Take from crime $Y Expected Net Benefits = E(NB) = P(B) . $B - P(C) . $C needs to be calculated for each option, i.e., E(NB) = [(1 - P(U)).$X + P(U).0] vs. [(1 - P(A)).$Y + P(A).(-$Z)] But

  5. On what basis does the individual make a choice? Legitimate Job Unempl: $0 Failure: CHOICE Jail: D days @ $Z loss Crime The Key: Success: Take from crime $Y E(NB) = [(1 -1).$X + P(U).0] vs. [(1 - P(A)).$Y + P(A).(-$Z)] BUTif P(U) = 1

  6. On what basis does the individual make a choice? Failure: CHOICE Jail: D days @ $Z loss Crime The Key: Success: Take from crime $Y E(NB) = [(1 - P(A)).$Y + P(A).(-$Z)] the only choice isCRIME

  7. Do individuals really behave like this? • Articles • by Krohm,”The Pecuniary Incentives of Property Crime”, • and Gunning,”How Profitable is Burglary?”, • Syllabus XV, tend to support this sort of analysis • We should add at least one more choice for persons on the threshold of selecting a career:

  8. Do individuals really behave like this? • Articlesby Krohm,”The Pecuniary Incentives of Property Crime”, and Gunning,”How Profitable is Burglary?”, Syllabus XV, tend to support this sort of analysis • We should add at least one more choice for persons on the threshold of selecting a career:Education (Investment in Human Capital)

  9. Do individuals really behave like this? • Articlesby Krohm,”The Pecuniary Incentives of Property Crime”, and Gunning,”How Profitable is Burglary?”, Syllabus XV, tend to support this sort of analysis • We should add at least one more choice for persons on the threshold of selecting a career:Education (Investment in Human Capital)-but opting for education requires wealth

  10. Do individuals really behave like this? • Articlesby Krohm,”The Pecuniary Incentives of Property Crime”, and Gunning,”How Profitable is Burglary?”, Syllabus XV, tend to support this sort of analysis • We should add at least one more choice for persons on the threshold of selecting a career:Education (Investment in Human Capital)-but opting for education requires wealth or an alternative income source

  11. Do individuals really behave like this? • Articlesby Krohm,”The Pecuniary Incentives of Property Crime”, and Gunning,”How Profitable is Burglary?”, Syllabus XV, tend to support this sort of analysis • We should add at least one more choice for persons on the threshold of selecting a career:Education (Investment in Human Capital)-but opting for education requires wealth or an alternative income source (or a subsidy)

  12. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations

  13. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities

  14. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits

  15. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions

  16. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions • A. Factors relating to Deterrence and Incapacitation

  17. Consider the Circular Flow Process: (again) Causal Forces Victim Costs A

  18. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and IncapacitationResources spent to raise

  19. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A)

  20. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A)

  21. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C)

  22. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C)b. Sentences:

  23. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C)b. Sentences:Prison/Jail (length)

  24. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length)Fines ($)

  25. As Bentham, and others since, have pointed out, choices for society, to prevent crime - mirror the choices of the potential criminal • Two basic choices in terms of value of expectations 1. Affecting the probabilities 2. Manipulating the values of costs and benefits • But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($)Probation (length)

  26. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raise a. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($)Probation (length)

  27. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length)B. Factors relating to future opportunities

  28. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length) B. Factors relating to future opportunitiesResources spent to

  29. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length) B. Factors relating to future opportunities Resources spent toa. Affect availability of jobs

  30. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length) B. Factors relating to future opportunities Resources spent toa. Affect availability of jobs i. Invest in jobs on aggregate level

  31. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length) B. Factors relating to future opportunities Resources spent toa. Affect availability of jobs i. Invest in jobs on aggregate level ii. Invest in individuals (training/ education) to make them more employable

  32. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length) B. Factors relating to future opportunities Resources spent toa. Affect availability of jobs i. Invest in jobs on aggregate level ii. Invest in individuals (training/education) to make them more employableb. Affect quality of jobs

  33. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length) B. Factors relating to future opportunities Resources spent toa. Affect availability of jobs i. invest in jobs on aggregate level ii. invest in individuals (training/education) to make them more employable b. Affect quality of jobsi. Aggregate - health care, unemploymentins.

  34. But there are really two classes of solutions A. Factors relating to Deterrence and Incapacitation Resources spent to raisea. P(A), P(C|A), P(Punishment|C) b. Sentences: Prison/Jail (length) Fines ($) Probation (length) B. Factors relating to future opportunities Resources spent toa. Affect availability of jobs i. invest in jobs on aggregate level ii. invest in individuals (training/education) to make them more employable b. Affect quality of jobs i. Aggregate - health care, unemployment ins.ii. Individual - quality of education

  35. Consider the Circular Flow Process: (again) Causal Forces B Victim Costs

  36. When we consider our circular flow model, there is one aspect of it that tends to be ignored • Rehabilitation, for apparently good reason

  37. When we consider our circular flow model, there is one aspect of it that tends to be ignored • Rehabilitation, for apparently good reason • The data show that for California and most states - inmates in prisons are convicts with sentences for 1 year or greater

  38. When we consider our circular flow model, there is one aspect of it that tends to be ignored • Rehabilitation, for apparently good reason • The data show that for California and most states - inmates in prisons are convicts with sentences for 1 year or greater • These individuals have been found guilty of serious crimes (except for those in for drug possession)

  39. When we consider our circular flow model, there is one aspect of it that tends to be ignored • Rehabilitation, for apparently good reason • The data show that for California and most states - inmates in prisons are convicts with sentences for 1 year or greater • These individuals have been found guilty of serious crimes • Roughly 70% recidivate within 36 months of release

  40. When we consider our circular flow model, there is one aspect of it that tends to be ignored • Rehabilitation, for apparently good reason • The data show that for California and most states - inmates in prisons are convicts with sentences for 1 year or greater • These individuals have been found guilty of serious crimes • Roughly 70% recidivate within 36 months of release • Most ultimately return to prison

  41. When we consider our circular flow model, there is one aspect of it that tends to be ignored • Rehabilitation, for apparently good reason • The data show that for California and most states - inmates in prisons are convicts with sentences for 1 year or greater • These individuals have been found guilty of serious crimes • Roughly 70% recidivate within 36 months of release • Most ultimately return to prison - approaching 90% over 5 years

  42. When we consider our circular flow model, there is one aspect of it that tends to be ignored • Rehabilitation, for apparently good reason • The data show that for California and most states - inmates in prisons are convicts with sentences for 1 year or greater • These individuals have been found guilty of serious crimes • Roughly 70% recidivate within 36 months of release • Most ultimately return to prison - approaching 90% over 5 years • So why be concerned about spending on rehabilitation projects?

  43. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in whichrehabilitation works very well

  44. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in which rehabilitation works very well • Peter Jennings , ABC News 5:30 pm, Tue., February 19, 1997

  45. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in which rehabilitation works very well • Peter Jennings , ABC News 5:30 pm, Tue., February 19 • San Francisco rehabilitation program run by a private,

  46. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in which rehabilitation works very well • Peter Jennings , ABC News 5:30 pm, Tue., February 19 • San Francisco rehabilitation program run by a private, non-profit foundation

  47. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in which rehabilitation works very well • Peter Jennings , ABC News 5:30 pm, Tue., February 19 • San Francisco rehabilitation program run by a private, non-profit foundation, at no cost to city

  48. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in which rehabilitation works very well • Peter Jennings , ABC News 5:30 pm, Tue., February 19 • San Francisco rehabilitation program run by a private, non-profit foundation, at no cost to city, operating for more than 20 years.

  49. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in which rehabilitation works very well • Peter Jennings , ABC News 5:30 pm, Tue., February 19 • San Francisco rehabilitation program run by a private, non-profit foundation, at no cost to city, operating for more than 20 years. • More than 23,000 parolees sent to center

  50. So why be concerned about spending on rehabilitation projects?2 reasons • There are cases in which rehabilitation works very well • Peter Jennings , ABC News 5:30 pm, Tue., February 19 • San Francisco rehabilitation program run by a private, non-profit foundation, at no cost to city, operating for more than 20 years. • More than 23,000 parolees sent to center • mandatory training in 3 job skills, work for wages

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