1. Life in High Poverty Neighborhoods

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

3. High Poverty Neighborhoods Why are crime and poverty linked? So what happens if poverty is more concentrated in specific neighborhoods?

4. High Poverty Neighborhoods Sociology work on high poverty neighborhoods. Doug Massey “A primary concern of those invested in the code of the streets is maintenance of "respect", which is loosely defined as being treated right or granted the deference one deserves.” “With the right amount of respect a person can avoid “being bothered” in public” Elijah Anderson “Beginning in childhood, individuals (in these communities) are socialized to fight in order to earn respect.” Jankowski “Individuals join gangs because they believe the gang can provide them with personal protection from the predatory elements active in low-income neighborhoods. People quite rationally, are either tired of being alert or want to reduce the probability of danger to a level that allows them to devote more time to their effort to secure more money.”

5. 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) But will greater economic and racial segregation lead to more crime overall? Why?

6. High Poverty Neighborhoods Summarizing sociological and ethnographic work on high poverty neighborhoods and crime. The need for “respect” is crucial for survival. Respect is gained by not backing down, and more notably, by engaging in violence. The implicit argument is that simply by living in a high poverty neighborhoods, individuals have to act on these violent norms, making them more violent and engage in more crime than they would otherwise. Is this a satisfying explanation? Is this a complete theory?

7. High Poverty Neighborhoods Thieves, Thugs, and Neighborhood Poverty (2010) My attempt to model the explicit interactions between violence and poverty. 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.

8. High Poverty Neighborhoods Thieves, Thugs, and Neighborhood Poverty (2010) Model must encompass: 1. Relationship between individual poverty and individual criminality. 2. Relationship between neighborhood poverty and neighborhood crime rates. 3. Relationship between concentration of poverty within a city and overall crime rates. Since the goal is to understand role poverty plays in criminality, model explicitly shuts down differences in “preferences” across income groups. Is this reasonable? Consider opening quote. How do differential “norms” across social groups fit in to this? This is a “simplified” version of the model in the paper.

9. 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 earnings (e=$75k available for consumption) (ii) low legal earnings (e=$10k available for consumption) Value dollars of consumption (m) via a utility function u(m) = m 0.5 So each person gets diminishing marginal utility in dollars of consumption (which won’t necessarily equal earnings). i.e., enjoyment from consuming a little bit more is getting smaller and smaller.

10. Model of Segregation and Crime Picture

11. 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 law-abider and law-abider incurs pain cost of 1 unit of utility Thug/Thug – both attack No money changes hands, both individuals incur pain cost of 1 unit of utility. And 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 poor and half of non-poor

12. 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 earnings e i 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? (and what will it depend on?)

13. Model of Segregation and Crime (cont.) Interpersonal Violent Crime (cont.) Now s uppose an individual chose to be a law-abider. What would be his utility if he encounters a thug? What would be his utility if he encounters another law-abider? So on average what would be his utility? (and what will it depend on?) So what equation determines who becomes a thug?

14. Model of Segregation and Crime (cont.) Interpersonal Violent Crime (cont.) Become thug if: Or Which is equivalent to So in this model, what are key determinants that determine who chooses to become a thug? Probably best seen graphically.

15. Model of Segregation and Crime (cont.) Interpersonal Violent Crime (cont.) Become thug if:

16. 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?

17. 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 law-abider when encountering a thug greater for poor than non-poor.

18. Model of Segregation and Crime (cont.) So model shows how both one’s own poverty and one’s neighborhood poverty can impact violent criminal behavior. In other words, it provides an explanation for why violent norms may arise in high poverty neighborhoods but not more mixed or rich neighborhoods based solely on economic factors. Moreover, a key outcome from the model is that 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.

19. Model of Segregation and Crime (cont.) So, to test the model, we want to see whether, all else equal, are citywide violent crime rates higher when a city is more economically segregated. What would be the simplest way to look at this? What might be the concerns?

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. More directly, we want to find something about cities that is correlated with income segregation but not directly related to current crime conditions. An “instrumental variable” for income segregation. What might be a valid instrument in this context? (In Job Corp study, whether a person was assigned to the “Treatment” or “Control” group was effectively an instrumental variable, as it was correlated with participating in Job Corp but not expected ability of person)

21. 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”)