This paper examines the economic impact of wine counterfeiting, with a focus on the Sassicaia scandal, publicized in 2020, regarding counterfeit 2015 vintage bottles of the iconic Super Tuscan wine. Wine fraud, documented since ancient Rome, has evolved alongside the industry, with key developments such as the Appellation d'Origine Contrôlée system aiming to curb it. The paper briefly reviews three other significant modern cases of wine counterfeiting: the Hardy Rodenstock “Jefferson bottles” affair, the Brunello di Montalcino scandal, and Rudy Kurniawan’s counterfeit operation. It then shifts to a detailed analysis of the case of Sassicaia. We combine informal analysis using data plots and a formal difference-in-differences analysis to assess the market impact of the 2015 Sassicaia scandal. We find that, surprisingly, the scandal led to an increase in the price of authentic 2015 Sassicaia, perhaps driven by perceived rarity and media attention.

Collusive agreements in the form of corporate cartels are complex structures. The involved firms need to agree on terms that are legally not enforceable. However, the interplay between the involved firms in a collusive agreement, i.e., the governance dimension within a cartel, has received surprisingly low attention. Using a comprehensive OECD dataset of 191 cartels from 2012 to 2018, this paper empirically demonstrates how polycentric governance within a cartel may possibly contribute to understanding its stability. It may be beneficial for the duration and lower sanctions imposed by competition authorities, especially for large cartels. By that, the paper sheds new light on two aspects: the entangled governance structures of corporate cartels and the relevance of the concept of polycentricity beyond public administration.

Extant research often assumes that the letter of labour codes is an adequate proxy for effective regulation. This paper empirically shows that such an assumption makes little sense for Senegal. We collect new objective measures of private and public labour enforcement, including workers’ awareness of their rights, access to the judiciary, penalties, and labour inspection resources and activities. We document that Senegal, as well as other countries in Francophone West Africa, is characterised by a combination of protective/stringent in-form labour codes and little enforcement efforts. Furthermore, we show that labour inspections target large and registered firms, while labour violations are more prevalent in small and unregistered firms, implying that the problem is substantially more complex than a lack of public inspection funding. We speculate it is mostly about the lack of effective representation of vulnerable workers in the policymaking process.

The consequences of legal access to medical marijuana for individuals' well-being are controversially assessed. We contribute to the discussion by evaluating the impact of the introduction of medical marijuana laws across US states on self-reported mental health considering different motives for cannabis consumption. Our analysis is based on BRFSS survey data from close to eight million respondents between 1993 and 2018 that we combine with information from the NSDUH to estimate individual consumption propensities. We find that eased access to marijuana through medical marijuana laws reduce the reported number of days with poor mental health for individuals with a high propensity to consume marijuana for medical purposes and for those individuals who likely suffer from frequent pain.

It is often argued that governments take advantage of extreme events to expand their power to the detriment of the political opposition and citizens at large. Violations of constitutional constraints are a clear indication of such opportunistic behaviour. We study whether natural disasters, conflicts and other extreme events systematically diminish governments' compliance with constitutional constraints. Our results indicate that governments are most likely to overstep their competences or disregard their responsibilities during civil conflicts, at the onset of international sanctions or following successful coups d’état. Interestingly, Cold War interventions by the United States that installed or supported a political leader led to a decrease in constitutional compliance in the target country, whereas Soviet interventions had no such effect. In contrast, banking crises and natural disasters, which threaten societies at large, but not necessarily the political elite, do not cause a significant decline in constitutional compliance.

This JOIE symposium features some of the most influential papers presented in the seventh version of the conference on The shadow economy, tax behaviour, and institutions. Accordingly, it brings together contributions from several disciplines and schools of thought in the social sciences and the humanities exploring such issues as the role of formal and informal institutions in understanding the shadow economy, the importance of social aversion in the motivations for tax compliance, and the dual nature of corruption. This introduction lays out the scope of the symposium, summarises the preceding literature on the topic, and provides a brief outline of each contributing article, noting that, although each paper focuses on a different economic and cultural context, they share several elements in common with alternative theories addressing the institutional, psychological, and sociological aspects of tax law compliance and other appropriate behaviours.

The ambiguous phenomenon of corruption has long been the cause of great theoretical debate in economics. By using Structural Equation Modelling, with the two types of corruption as a latent variable, this paper employs causal and indicative variables to the Latin American region to test for rent seeking and systemic corruption during 1980–2018. The findings provide evidence for two types of corruption, one generated by greed, and the other a solution to market failures. Such results support the view that corruption encompasses a complex set of social behaviours that may require a stronger definitional approach.

Bystander programs contribute to crime prevention by motivating people to intervene in violent situations. Social media allow addressing very specific target groups, and provide valuable information for program evaluation. This paper provides a conceptual framework for conducting benefit–cost analysis of bystander programs and puts a particular focus on the use of social media for program dissemination and data collection. The benefit–cost model treats publicly funded programs as investment projects and calculates the benefit–cost ratio. Program benefit arises from the damages avoided by preventing violent crime. We provide systematic instructions for estimating this benefit. The explained estimation techniques draw on social media data, machine-learning technology, randomized controlled trials and discrete choice experiments. In addition, we introduce a complementary approach with benefits calculated from the public attention generated by the program. To estimate the value of public attention, the approach uses the bid landscaping method, which originates from display advertising. The presented approaches offer the tools to implement a benefit–costs analysis in practice. The growing importance of social media for the dissemination of policy programs requires new evaluation methods. By providing two such methods, this paper contributes to evidence-based decision-making in a growing policy area.

Total cost estimates for crime in the USA are both out-of-date and incomplete. We estimated incidence and costs of personal crimes (both violent and non-violent) and property crimes in 2017. Incidence came from national arrest data, multi-state estimates of police-reported crimes per arrest, national victimization and road crash surveys, and police underreporting studies. We updated and expanded upon published unit costs. Estimated crime costs totaled $2.6 trillion ($620 billion in monetary costs plus quality of life losses valued at $1.95 trillion; 95 % uncertainty interval $2.2–$3.0 trillion). Violent crime accounted for 85 % of costs. Principal contributors to the 10.9 million quality-adjusted life years lost were sexual violence, physical assault/robbery, and child maltreatment. Monetary expenditures caused by criminal victimization represent 3 % of Gross Domestic Product – equivalent to the amount spent on national defense. These estimates exclude the additional costs of preventing and avoiding crime such as enhanced lighting and burglar alarms. They also exclude crimes against businesses and most white-collar and corporate offenses.

Crime is an important outcome in many social policy evaluations. Benefits to society from preventing crime are based on avoiding victimization and freeing criminal justice system resources. For the latter, analysts need information about the marginal cost of policing for different types of crime across jurisdictions; however, this information is not readily available. This paper details key economic concepts relevant to law enforcement services, and then combines publicly available police expenditure data with insights from observational and time-diary studies to generate state-level, crime-specific, average variable cost estimates for crime-response services conducted by police by crime type. Since there is considerable uncertainty concerning various parameters underpinning these calculations, we use Monte Carlo simulation methods to incorporate the uncertainty into our estimates. This study finds that the U.S. population-weighted average variable cost of law enforcement response per police-reported Part 1 violent crime is $10,900, ranging from $6900 to $15,400 at the 10th and 90th percentiles, respectively. For a Part 1 property crime, the equivalent figure is $1300, with a range from $700 to $1700.

Low-income urban neighborhoods in developing countries receive low levels of public services, often not supplemented by community provision due to low rates of informal tax compliance. This paper presents evidence from low-income neighborhoods in Quito, Ecuador using an IV empirical strategy that the global titling of neighborhoods sustains informal taxation. The estimates reveal a sizable average effect of global titling on in-kind labor household that is drawn from a broad base. Evidence is also found which suggests that the possession of a global title provides a neighborhood organisation with tools that deter free-riding behavior even among the individually-titled residents.

This paper looks at how to measure the tradeoffs in monetary terms that the public is prepared to make with respect to adoption of different community policing options. The approach advanced is a discrete choice experiment in which survey respondents face different policing options which can be described by a set of attributes ranging from costs to outcomes. The main contribution of this paper is to show how to go beyond the usual characterization of the monetized benefits of reducing the level of a specific type of crime to asking the question of whether those benefits differ depending on how that outcome is achieved.

The police are widely recognized as an important deterrent of crime, with investments in policing broadly associated with lower crime rates. Much less is known about how investments in policing contribute to crime reductions, or the relative merits and risks of specific activities in which officers engage, leaving policing as an area in which benefit-cost analysis methods stand to make a significant substantive contribution. However, the implementation of these methods involves challenges related to measuring both the quantity and quality of policing involved in a given dosage of policing, as well as the causal effects of police practices on crime. This essay lays out several of the challenges inherent in understanding the benefits and costs of policing practices, with a specific eye toward practices commonly known as “proactive policing” practices, and their effects on crime rates. I lay out potential strategies for resolving these challenges, which focus largely on identifying exogenous discontinuities in policing practices that can be used to assess outcome differences. Thorough assessment of policing practices should apply as many of these strategies as possible, in order to understand how robust or sensitive substantive conclusions may be to strategies used.

This article examines perceptions and practices of habitual usury, a crime consisting of lending above the legal rate of interest on multiple occasions, in early nineteenth-century France using descriptions of usury trials found in the popular legal periodical the Gazette des Tribunaux. Following the French Revolution, French law legitimized lending at interest in principle, but punished ‘habitual usurers’ who ‘made a profession’ from lending above the legal limit. The decades that followed witnessed striking growth in banking, joint-stock companies and other financial institutions. Highlighting the connections between cultural constructions of the usurer and the actual processes deemed usurious, this article seeks to understand a paradox: that usury was deemed omnipresent in French society yet it was rarely prosecuted. By examining how habitual usury was defined and prosecuted in French courtrooms, this article shows how habitual usurers both validated and undermined stereotypical notions of predatory lending behavior found in popular culture of the time. Habitual usury trials also reveal the actual practices that allowed those excluded from formal financial networks to participate in the growth of capitalist relations. This article argues that the nineteenth-century obsession with the usurer can be explained by the crucial role played by usurious practices in the credit economy of the period. As such, prosecution of usury tended to focus on the character of the usury rather than the actual practice of illegal lending. This article suggests that by occasionally prosecuting particularly egregious ‘immoral’ moneylenders, the legal system and journals like the Gazette des Tribunaux worked to keep credit accessible to the ‘underbanked’.

This paper reports on a benefit-cost analysis of a targeted intervention program, the YouthBuild USA Offender Project (YBOP), aimed at low-income, criminal offenders who are 16–24 years old. Using data on 388 participants, we find: (1) evidence of reduced recidivism and improved educational outcomes that exceed our expectations based on similar cohorts and (2) evidence consistent with a positive benefit-cost ratio, indicating that every dollar spent on the YBOP is estimated to produce a return on investment between $7.20 and $21.60, with benefits to society ranging between $174,000 and $281,000 per participant at a cost to society between $13,000 and $24,000.

Prevention of juvenile sex trading in the US has risen to prominence in public policy discourse. We develop a generalized benefit-cost model to shed light on this policy issue and illustrate the framework with a case study from Minnesota. The model treats government-funded intervention as an investment project and calculates its net present value. Benefits are derived from harms avoided by reducing the extent of sex trading. The impacts of youth involvement in the market for sexual services are highly complex, and clear data on them are lacking. To account for empirical ambiguity we develop the model around a representative individual, approximate the effect of intervention on the sex market, and conduct sensitivity analysis with key model parameters. The case study evaluates seventeen distinct harms caused by sex trading based on conservative best estimates from scholarly literature. We find a large positive Net Present Value, suggesting it is in the best interest of Minnesota taxpayers to support intervention.

The article questions the degree of importance that has been attributed to insecurity in the recent analysis of Colombia's lack of development in the 19th century, and of the lack of development in post-independence Latin America generally. The author criticizes their lack of empirical evidence, and their lack of comparative focus, both within the hemisphere and outside it, and offers a series of arguments against their conclusions. His own evidence in the Colombian case indicates that neither «anarchy» nor deficiencies in property rights constituted significant brakes on the development of the country's economy. He also questions the direction of causation in institutionalist explanations.

This paper studies in a model à la Bebchuk how the existence of an asymmetric information on the risk aversion of parties engaged in a trial affects the way they litigate. We first consider the situation where the plaintiff is the informed party, and solve for the equilibrium with and without pre-trial negotiations. Then, we analyze the comparative static of the model and the effects of alternative fee-shfting rules. Finally, we discuss several extensions: the case where the defendant is the informed party, the influence of the representation of litigants’ preferences, and of the existence of the optimistic bias (or self-serving bias).

L'amour lorsqu'il est poussé à son paroxysme confine à l'étouffement. Telle est la morale de cet article dans lequel un parent altruiste module son offre de travail en partie pour assurer le meilleur niveau de vie possible à son enfant. Lorsque le travail des parents et celui des enfants sont parfaitement substituables dans la production, ce comportement pousse les salaires à la baisse. Si les salaires horaires sont rigides, l'emploi est rationné et les jeunes sont les premières victimes de ce rationnement. Nous montrons que ce mécanisme est à l'origine de fluctuations endogènes entre chômage et plein emploi lorsque la productivité des travailleurs âgés est négativement influencée par la durée de chômage passée. Nous analysons également le soutien politique pour le salaire minimum lorsque la productivité des jeunes est soumise à un aléa : le salaire minimum, l'offre de travail des vieux et le chômage des jeunes augmentent tous trois avec le facteur d'altruisme.

Cet article s'attache à donner des fondements théoriques à la structure verticale des réseaux de distribution des drogues illicites, en faisant appel à l'analyse des relations verticales et en intégrant le caractère illégal de cette activité. Il analyse ensuite la manière dont les autorités, par l'intermédiaire des coûts de répression qu'elles imposent aux vendeurs de drogues, peuvent mettre en œuvre dans le cadre d'un équilibre décentralisé l'optimum social. Nous montrons qu'un réseau verticalement séparé, structure optimale de premier rang, très couramment observée sur ce marché, ne peut jamais être mis en œuvre.