Socially optimal public security policy and educational attainement

• Grant number: 16/19823-5
• Support Opportunities: Scholarships abroad - Research Internship - Doctorate (Direct)
• Start date: January 04, 2017
• End date: December 20, 2017
• Field of knowledge: Applied Social Sciences - Economics - Social Welfare Economics
• Principal Investigator: Rodrigo Reis Soares
• Grantee: Eduardo Ferraz Castelo Branco Ferreira
• Supervisor: Lance John Lochner
• Host Institution: Escola de Economia de São Paulo (EESP). Fundação Getúlio Vargas (FGV). São Paulo , SP, Brazil
• Institution abroad: Western University , Canada
• Associated to the scholarship: 15/26082-9 - Theoretical models for welfare analysis of public security policies, BP.DD

Abstract

This project aims to develop a dynamic model of crime with heterogeneous agents with possibility of investing in human capital. The model incorporate a technology of apprehension depending on both investment in police and number of criminals. This feature of technology is realistic and allows for social interactions in the determination of equilibrium crime rates, in the sense that higher crime reduces the probability of apprehension of any given criminal and therefore encourages criminal activity. There are three sources of heterogeneity of agents: ex-ante different abilities, ex-ante propensities to crime and ex-post level of education. Each agent decides whether to commit crime and to educate himself, given punishment intensity (expected time spent in prison and associated utility loss), probability of apprehension and wage gains due to a higher level of education. I intend to focus mostly on stationary rational expectations equilibria. The model aims to capture equilibrium effects in the positive analysis of public security policies and educational attainment in ways that are not possible in reduced form empirical estimates. In addition, it gives the possibility to calculate the optimal public security policy (the pair punishment intensity and investment in police) in terms of some efficiency metric or social welfare function. Another objective is to calibrate the model. (AU)