[SOLVED] Econ 490 Economics of Crime Final Project Assignment

Final Project Assignment

Econ 490 Economics of Crime

I. The Assignment

For your final projects, you will conduct an economic analysis of Season 3 of The Wire. The project will involve an in-class presentation as well as a 5-10 page (if single spaced) written product. The goal is to use economic concepts – how people respond to the incentives they face, how supply and demand interact, how market regulation affects prices, etc. – to explain why the characters behave as they do and how their decisions might differ from what a social planner would prefer.

Each group will be assigned a set of characters on which to focus (the police, the users, the high- level drug sellers, or the street-level drug sellers). In each case, your project should address the following questions:

1.   What enters this group’s (or, if you prefer, one or two individuals in the group) utility function? This can include positive incentives – what they value or what provides benefits – as well as negative incentives – what gives them disutility or what they try to avoid.

2.   What are the relevant constraints they face? That is, what is stopping them from just getting as much of the things they like as they want? (Remember that costs, benefits, and constraints can be both monetary and non-monetary.)

3.   How does this constrained optimization – maximizing utility under the constraints you have identified – shape the decisions they make? In other words, how does economics help us understand people’s actions, especially those that might otherwise seem illogical?

4.   When other groups act, how do the incentives and constraints facing your key characters change? What would economic theory and/or the findings we’ve seen in the literature suggest should happen when those things change? Is that what actually happens?

5.   Do the responses have consequences for people other than those who are making the decisions? Is your decision-maker taking the full costs of those consequences into account? Why or why not?

6.   If you were a benevolent social planner, what would you change to improve social welfare? (The answer should not be “make people respond differently.” Work within the constraints of how your group of people are making their decisions and think about whether there are feasible regulations or policies that would incentivize people to reduce any socially harmful behavior. that you have identified in part 5.)

There are multiple ways to structure a successful analysis. You might choose 1 or 2 characters of your assigned type and trace their behavior. through the season. Or you might choose several particular incidents that involve a range of characters and do a deeper dive into those. You do not need to analyze everything that happens in the entire season, but you should not ignore the determinants or later consequences of the decisions you discuss.

Your presentation should be at least 15 minutes and no longer than 18, followed by a few minutes of Q&A. All members of the group should speak. Please be respectful of your peers and come to class even after your own presentation. Pop quizzes are still fair game through the last day of class …

The goal of the presentation is to explain your key insights and present supporting evidence in a clear and engaging way; you do not need to cover every single detail that is in the written version (i.e., don’t just read your paper as the final presentation). The written product should be a more formal version of your arguments that provides supporting evidence from both the show and from the course (theory and literature), and includes all relevant citations. The presentation and paper will weigh equally towards your grade.

II.        The Criteria

A successful final project will lay out a clear and specific economic analysis, not just intuitive arguments. In particular, an A-level project will:

–    Focus on a small number of key aspects of the series that demonstrate relevant economic principles

o This means choosing a small number of characters or a few concrete incidents

rather than trying to explain all aspects of the plot. The exact number will depend on how broadly you define an incident, but in most cases will likely be between 2 and 4.

–    Identify relevant incentives and constraints, as well as how events in the series change those factors

o This will involve thinking broadly about monetary and non-monetary factors, and thinking carefully about what enters characters’ utility functions.

–    Explain decision-making using economic arguments (rather than psychological, sociological, political, or emotional reasoning)

o This should involve giving specific, concrete examples such as character

quotations and specific incidents showing what drives decisions, how people are maximizing subject to the constraints they face, and how market forces interact.  Do not rely on broad generalizations or overall plot summaries.

–    Tie the analysis into the theory and literature discussed in the course

o This could mean using graphs that show what happens when certain changes

occur, or comparing the direction and magnitude of behavioral change to what we saw estimated in the literature, or pointing out how certain dialogue reflects the kind of maximizing we see in economic theory, or explaining why other interventions we read about might be preferable from a social perspective. You don’t necessarily need to write down a complete economic model, but don’t be afraid of using graphs, numbers, or equations if they help make your point.

–    Be thoughtful about the unintended consequences and/or externalities resulting from

decisions, and be creative in thinking through how a social planner might adjust the choices that your decision-makers face to generate a more socially optimal outcome.

Focus on how the characters you model would respond to your proposed regulation given how you are specifying their decision-making process, and why that would be welfare enhancing.

–    Demonstrate an understanding of the entire series (not just the first several episodes)

–    Give an engaging presentation that clearly summarizes the arguments and the evidence

–    Submit a well-structured, clearly-written analysis that builds a series of specific insights into an economic argument about why characters behaved in a certain way, the implications of their decisions, and the way in which a social planner who understands how people make decisions would improve social welfare

III. Example Questions

To help guide your thinking, here are a few questions for each set of characters that might motivate your analysis. You are not obligated to answer these questions in particular, nor do you  need to try to answer them all at once. They are here to help spark ideas and provide examples of the kind of thinking you should be doing. You are free to (and should!) address whatever other questions you think are most interesting or enlightening. You may also address the interactions between or effects of your assigned group on others not mentioned (politicians, community members, etc.).

Police – higher-level commanders (Rawls, Burrell, Colvin), the investigative team (McNulty,

Kima, Daniels, Lester, Bunk, etc.), and/or the street level cops (Herc, Carv, and their colleagues)

–    Why do the police do street buy-and-busts? Do they help reduce drug crime and drug use? Why or why not?

–    What happens at Compstat meetings? How does that change what district leaders do in their districts? Does it decrease crime or not? Why?

–    What do the politicians say to the police, how and why does that change their decisions, and how does it in turn affect policing and crime?

–    Why do the police shift their emphasis to finding bodies instead of busting drugs? Does everyone (in the show or in the literature) agree that the emphasis is the best way to reduce crime?

–    Why does Colvin establish the safe zones?

–    How does police deployment change after Hamsterdam? Why? Does it work? Is the size of the change consistent with the literature?

–    What is Carver’s tax initiative? Is it structured in a way that everyone should want to participate? What effect should it have on the drug market? Does it?

–    What does Colvin argue helped cause the deterioration of police-community

relationships? Does his argument have any implications for other ways to reduce crime?

–    Why do the top brass (and politicians) react the way they do to Hamsterdam? What does that tell us about which costs and benefits they care most about?

Demand Side of the Market – Bubbles, Johnny, and the other drug (or alcohol) consumers

–    In a book by the creator of The Wire, there is an argument that for an addict, drugs create anarchy; economics cease to exist. Is it true in the show that the addicts never actrationally? Do we ever see users responding to price? To other incentives?

–    How does Hamsterdam affect quantity, price, and consumption? Is the consumer response consistent with economic theory?

–    How do the other attempts at drug regulation affect users? What effects do they have on consumption and overall welfare? What are the implications for how society should think about regulating drug use?

–    Why do Johnny and Bubbles’ behave differently? What do the differences imply about the effectiveness of different kinds of social policy across heterogeneous people?

–    Why do the Johns Hopkins folks get involved? Would the social planner be pleased? Why or why not?

–    We see Bubbles working in the legal(ish) market as well as working and consuming in an illegal market. How do those decisions interact? Why does he float back and forth? Why  don’t others?

–    In an earlier season, we learn that Johnny is HIV positive (which at the time had less

effective treatment options than it does today). Does that help explain Johnny’s behavior? Why or why not?

–    Is other illegal activity a complement or a substitute for drug use? What does that tell us about how drug regulations should affect other crime? Does that happen in practice?

–    Alcohol is a drug, too. Does the answer to the prior question help us explain the ways different characters behave while using alcohol?

–    Drug users are committing crimes, too (both to fund their habits and just by using illegal drugs). How does police enforcement work with drug use crimes? How does that align with our model of how people decide to commit crime? Is the enforcement we see in the show socially optimal?

High–Level Dealers – Stringer Bell, Avon, Marlo, Proposition Joe (and if you wish, Brother Mouzone, although his plot line may be hard to understand without watching Season 2)

–    Why does Stringer Bell not care about territory? Why does Avon disagree? What

implications do the different choices have for the volume of drug use and violence? For how policy might address drug-related crime?

–    When does Marlo choose violence and when does he say to hold off? Why?

–    How do the dealers decide when to put people on or take them off corners?

–    What do the different dealers do (or not do) with their profits? Why?

–    Why does Stringer cede some of his power to join with other high-level dealers?

–    How does the availability of product change operational decisions, user consumption, and crime? Can economic theory explain that?

–    Why is Stringer willing to spend so much money to become a developer?

–    How does Hamsterdam affect quantity, price, and the resulting profits? What happens to staff allocation? Is the supply response consistent with economic theory?

–    How is it possible that people have respected the Sunday truce for so long? Why would they do that?

–    Why does Stringer turn in his own staff for the Hamsterdam shooting?

–    Why do the leaders engage in wars with each other despite the risks to themselves and the constant loss of their staff?

–    Why do Stringer and Avon make the betrayals they do at the end?

Street-Level Dealers – Bodie, Poot, Cutty, Omar and his crew, etc., and the hoppers, lookouts and touts

–    What is driving Cutty’s decision when he comes out of prison? What changes his mind?

–    Why do the guys on the street keep selling even when the risk of death is so high? How are they convinced to keep fighting their bosses’ wars despite the risk to themselves?

–    What role do guns (“whistles”) play in the day-to-day behavior of the dealers?

–    How does the opening of Hamsterdam change the costs and benefits of being a street level dealer? What happens to the lookouts, touts, and runners? Why?

–    Omar often runs towards danger. Is he irrational? Or does he also respond to changes in costs and benefits? (Why doesn’t he want to steal from Hamsterdam? Why does he pursue Barksdale so relentlessly?)

–    Why do Bodie and Poot stay in their jobs despite the danger? What does their behavior tell us about how effective particular policing strategies are likely to be? What might convince them to leave the illegal market?

–    The Deacon tells Colvin that taking “the game” out of dealing takes the heart out of it. What does that tell us about sellers’ risk preferences? Is that universal or limited to marginal cases?

–    What is the draw of Cutty’s boxing center for the kids who go? What does that tell us about how youth are making decisions about illegal work?

–    What happens to particular dealers when Hamsterdam closes? What happens to crime? What does that tell us about the elasticity of labor supply in the drug market?