Crime and mental wellbeing

Along with two colleagues at University College London – Francesca Cornaglia and Christian Dustmann – I was lucky enough to yesterday receive two years’ ARC funding for a project on “The impact of crime on the mental wellbeing of communities”. Here’s the summary of what we plan to do:

Considering not only the direct impact of crime on the victims but also the indirect consequences of living in a community with a higher crime rate may in fact lead to a more accurate analysis of the size of the consequences of criminal activities on the society. Further, it may also be the case that the negative externality of crime on non-victims is much larger for some crimes than for others. If this were the case, it could have implications for the way in which police resources are presently distributed across different crimes. Better understanding the total societal cost of crime to both victims – and non-victims – could therefore help improve public policy.

The project was funded through an ARC “linkage international” grant with the ESRC (the ARC’s UK counterpart). The other three funded projects looked at:

  • lexical stress (ie. the way we pronounce particular words)
  • childhood obesity, and
  • housing wealth.

So if you’re an Australian taxpayer – thanks, I hope I won’t let you down. (Actually, given that your taxes pay my salary, I suppose I should be saying that on a daily basis.)

Advertisements
This entry was posted in Economics Generally, Universities. Bookmark the permalink.

49 Responses to Crime and mental wellbeing

  1. Actually, given that your taxes pay my salary, I suppose I should be saying that on a daily basis.

    Yes, and you should also ensure every policy reccomendation you make works towards minimising the taxes we all pay.

    I should also thank the Australian taxpayer — thankyou for the generous HECS loan that I may or may not repay, depending on whether I feel like working in Australia, the US, UK or India after I graduate 🙂

  2. Andrew – We are getting value for money from you.

    Sukrit – I will use you as a case study as to why we should have stronger collection mechanisms for student loans.

  3. Andrew N, I consider it a moral obligation to do what you can to minimise what you pay to the government. It’s possible the more difficult the government finds it to recollect from people like me the more they will think twice about setting up schemes like HECS in the first place.

  4. derrida derider says:

    An interesting project. Obviously you’re going to have to deal with all sorts of endogeneity though – the bane of neighbourhood-based research (does an area having low mental wellbeing lead to it being a high crime area, or does the crime cause the lack of wellbeing? Or are both a product of people being poor and living in cheap areas?).

  5. derrida derider says:

    Oh, and Sukrit – please pissoff overseas. It’s worth us foregoing the HECS money to get rid of people with such a cavalier attitude to their social obligations.

  6. Sir Humphrey says:

    Sukrit, you have an interesting interpretation of moral obligation.

    Taxpayers fund your education – most benefits of which accrue to you – scheme exists by which you pay it back when those benefits arise – no moral obligation to do so.

    Minimising tax – moral obligation to do so.

    I’d actually argue that if the external returns to your education are non-zero, then you should actually pay more HECS if you leave the country (since those returns are now going elsewhere you have now stiffed the Australian taxpayer twice over).

  7. Sinclair Davidson says:

    Well done. A fantastic effort.

  8. Sinclair Davidson says:

    ‘you have now stiffed the Australian taxpayer twice over’

    I have no sympathy for DD or SH’s view. The taxpayer has chosen to stiff themselves. If individuals had to have bank loans and not HECS loans this problem would never arise. Just a thought.

  9. Curiously, Sukrit’s position strongly resembles that of people like left-winger Ryan Heath in denying any obligation to pay for what they receive. But really the only difference between them and the thousands of others heading off on the working overseas trip is that they are righteous and brazen about it. The financial consequences for taxpayers are the same regardless of underlying attitudes, and the basic problem is not Sukrit’s attitudes or Ryan’s attitudes but system design.

  10. Sukrit Sabhlok says:

    I have no ‘social obligation’ to a government! Especially one that has coercively taken money from taxpayers to fund the bureaucracy and generous terms behind HECS. I say annoy the government at every turn if it is in your interests, because if the government were allowed to be more efficient we would all be slaves right now.

    I would encourage other individuals bearing a HECS debt to do the same because once the government takes their money through legalised theft, it is no longer theirs anyway so we might as well thwart it at every turn. Obviously, it would be different if I had taken a bank loan where the money that was lent to me was not tainted in the means through which it had been obtained.

    Same goes for people who evade income tax. I don’t morally condemn them, just as I don’t condemn those who smoke marijuana. They are justified in their civil disobedience.

  11. Sukrit Sabhlok says:

    Curiously, Sukrit’s position strongly resembles that of people like left-winger Ryan Heath in denying any obligation to pay for what they receive.

    I am happy to pay for what I receive. Just not to a government that I know will probably use that money in schemes designed to stifle individual freedom.

  12. Verdurous says:

    Crikey, the libertarians are canabilising each other.

  13. Sir Humphrey says:

    Sinclair, you make a good theoretical point but do you really think bank financing would be a better policy than an income-contingent loans scheme? I can’t see that the banks would ever go for income-contingent lending.

    It is reasonable to think that the taxpayer might want to partly subsidise education on the grounds that there are some external benefits from it (you can then argue about how big those are). The double whammy when sukrit leaves town is that not only is the debt not repaid but any other benefit that might flow from his education are lost too. And the collection system encourages exactly that.

  14. Sir Humphrey says:

    Sukrit:

    “I say annoy the government at every turn if it is in your interests, because if the government were allowed to be more efficient we would all be slaves right now”

    “…a government that I know will probably use that money in schemes designed to stifle individual freedom”

    Oops, my bad. I thought we might discuss education policy in the real world but we appear to be in libertarian fairy land.

    Sorry for hijacking your thread Andrew L. Congratulations on your grant – well deserved, I’m certain you won’t let us down.

  15. Sukrit Sabhlok says:

    “I thought we might discuss education policy in the real world but we appear to be in libertarian fairy land.”

    Strange how your ideas for making the world a better place seem to invariably involve forcefully taking hard-earned money from others.

  16. Sukrit Sabhlok says:

    “It is reasonable to think that the taxpayer might want to partly subsidise education on the grounds that there are some external benefits from it”

    Sure, subsidise primary education if you want people to have a minimal amount of numerical and literacy skills. But university education? Presumably, I will capture 99% of the benefit from my degrees. If I had known society would benefit more than me, the rational thing would have been to never go to university in the first place. My point is you don’t need to subsidise something people would have done anyway. Dismantle HECS and you will see innovative private operators rising to meet the demand from students.

    If we were all compliant and cheerfully handed over money to the government, it would only serve to reinforce their view that its okay to rob Paul to pay Peter (me).

  17. Sir Humphrey says:

    Sukrit, settle down a bit will you?

    I have acknowledged that the size of externalities from your education are open to debate, but I don’t know of anyone seriously arguing that you keep 99%. In my view income-contingent loans are a decent way of finding higher education, in the real world where political realities exist and financial markets are not perfect (I am yet to be convinced that bank loans for uni degrees are a starter, or will ever be).

    You’re still at uni – what are you studying anyway?

  18. “I am happy to pay for what I receive. Just not to a government that I know will probably use that money in schemes designed to stifle individual freedom. ”

    Sukrit – All the money you owe to the government for your education was paid direct to the University of Melbourne, to partially cover the costs of your education (in addition, you get a direct subsidy from the Commonwealth and a cross-subsidy from full-fee students). Even within a libertarian framework, I would put this is a very different category to coercive taxation. You have voluntarily chosen to attend the university, and to take out a soft loan.

    To not repay it is to say that other Australians – who had no part in your decision to attend university – should nevertheless be coercively taxed to pay for it.

  19. Sinclair Davidson says:

    I don’t Sukrit has a moral obligation to anyone, and certainly not the state. We do not pay taxes because of moral obligations, we pay because of coersion. The externality to higher education must be low (if not zero).

    But, more seriously, I financed a substantial portion of my own higher education by working and by borrowing funds from a bank – at 12 %. While my parents signed surety – I still had to pay back the loan and interest. So loans can and do work. Where they might fail is in the surety component, and government might be of assistence there. (I should also add that had I failed in my studies not only would I have had to repay the money, but also would have been conscripted into the milutary).

  20. ChrisPer says:

    Andrew, sincere congratulations on your grant, and I look forward to hearing the outcomes of the work.

    To extend your proposition sideways, after these years of reading criminology papers eg by the AIC which present interesting summary data then make a waffling bow to allocation of scarce public resources, I believe you have the intellectual horsepower to extend the implications more widely than mere allocation of police funds!

  21. Sir Humphrey says:

    Sinclair

    Good point – some sort of government guarantee might work quite well, and gets around my personal concern that without some sort of income contingent funding scheme, one’s choice of parents becomes very important.

    I would be interested in Andrew Norton’s views on that sort of policy. It is probably also instructive to think about how the risk ought to be divided up (you sort of alluded to that).

    That is a more interesting discussion, but as far as the peurile discussion goes: there is something that gets my back up about student libertarians who whinge about the evil coercive state while sucking at its teat (talking to Sukrit here). They’re as bad as student lefties who bang on about the “workers” when they’ve never done an honest day’s work in their lives.

  22. You have voluntarily chosen to attend the university, and to take out a soft loan.

    You’re right, I could have refused a HECS loan on principle. But why would I do that? I am – through my parents who are taxpayers – entitled to it.

    The system takes money out of our left pocket and (usually) puts less of it back in our right. If anything, it is correct for me to accept some of that money back in the form of subsidised higher education. Others accept different forms of welfare.

    To not repay it is to say that other Australians – who had no part in your decision to attend university – should nevertheless be coercively taxed to pay for it.

    Not sure why this would be the case. It was the government that forcefully intervened as an intermediary between me and the University of Melbourne. I didn’t ask it to. Let the government sort out its arrangement with third-parties. My debt is to the tax office, an instrument of government .

    My moral view is we should (a) resist coercion in all forms (b) resist such coercion, whatever the form it takes – including HECS.

    So I choose to do a cost-benefit analysis where I weigh up how much resistance I can offer the government against the penalties that apply. I might still end up paying back the debt if I find it’s not worth my while to move overseas.

    Others may think government really does spend our money wisely and that the taxation used to administer HECS was not coercively obtained and that whatever the tax rate, no personal cost-benefit analysis should be done.

    but as far as the peurile discussion goes: there is something that gets my back up about student libertarians who whinge about the evil coercive state while sucking at its teat

    Similar point as above. Do you doubt that taxes are a form of coercion? Try not paying it 🙂

    Remember I am arguing for getting people like me off the ‘teat’, not against it.

    I don’t have to have experienced cancer to know it’s bad. Similarly, I should be able to criticise HECS while benefiting from it. Separate the person from the issue.

  23. PS – I should add that since I’m legally an adult I am technicaly not the one directly paying into the churning system (its still questionable whether parents who have university age kids are getting full value for their money by having it pass through government hands first & moreover, people without any kids are paying for students like me). However, Andrew (N)’s suggestion to have better collection mechanisms seems doubly wrong to me. You can’t fix a silly government program by adding another layer of taxpayer financed government to it. Especially if the whole program is distortionary and should never have existed in the first place.

  24. PPS – Sir Humphrey, why did you write “Minimising tax – moral obligation to do so.”? Isn’t that what I’m saying? Mass resistance of the government by refusing to pay back HECS’ debts would be the most effective way of getting rid of the program, hopefully reducing the overall tax burden.

    We have a civic duty to let government know when it is taking coercion too far. The ballot box isn’t very effective at this because we vote for a package rather than particular issues. But even politicians should be able to understand that mass tax evasion means the rate is too high.

  25. Sir Humphrey says:

    Sukrit: “Remember I am arguing for getting people like me off the ‘teat’, not against it.”

    Yes, fair enough, but you started out with what looks a lot like gloating that you are getting a loan that you “may or may not repay”. I think you’ll find that’s why DD suggested you piss off overseas, so obviously I’m not the only person who found that a bit obnoxious.

    My point about moral obligations was that most people would consider themselves morally obliged to pay back a soft loan, whereas you seem to think that you have a moral obligation to avoid it. That struck me as an odd form of “morals”. I’m not disagreeing that you said it – I’m just surprised you don’t see the irony.

  26. “Not sure why this would be the case. It was the government that forcefully intervened as an intermediary between me and the University of Melbourne. I didn’t ask it to.”

    Actually, you did. The student contribution amount is levied by the University, and you had to sign a request form to get a loan from the government (your elgibility would then have been checked).

    Having to repay voluntarily acquired debts is not coercion, even if an agency (the ATO) that normally acts coercively is in this case collecting the money. But if you failed to repay a bank loan, they too could get the state, via a legal judgment, to seize your assets to repay them.

  27. Sukrit,

    You claim that you “— consider it a moral obligation to do what you can to minimise what you pay to the government.” (see this comment above: http://andrewleigh.com/?p=1250#comment-32816 ).

    Does this mean that if you could get away with it, you would pay no taxes whatsoever? If so, do you think this is reasonable behaviour for everyone? If this is the case, then how should we fund the courts, the police, the defence forces and the like?

    Regards,

    Damien.

  28. Sinclair Davidson says:

    First, we should apologise to Andrew L – this thread is far away from the original post. Second, we should thank Sukrit – this is a concrete debate about what is wrong with HECS. (Will post a longer critique after dinner – sorry, must run).

  29. Whew! Ok, one at a time.

    SH: I wasn’t trying to be obnoxious. Just stating the truth. I honestly haven’t made up my mind on what I will do after I graduate. I don’t think it’s legally wrong for me to consider doing this – the system gave me this incentive.

    Damien: If I knew I could get away with it, I would not pay tax. Currently, I have no incentive to explore ways of avoiding tax. But people on the top rate do. And I see nothing morally wrong with that. We shouldn’t pay a penny more to the government than required, and we should fleece the government at every opportunity because all taxation is legalised theft & morally unjust.

    If the government really just restricted itself to the core functions of government I would have no problem – but it wastes money doing more, much more. That’s one problem with having the commonwealth collect income tax rather than state governments. If they decide to use their powers of coercion to overtax us, it’s harder to move countries than it is to move to a different state/territory.

    We should recognise taxation is pure evil, albeit a necessary one. This means government should minimise the tax burden. Tax evasion is a wake up call sent to the government from those who value their freedom enough to engage in civil disobedience. Kerry Packer put it well.

    P.S. Sorry Andrew Leigh

  30. Sinclair Davidson says:

    The government has chosen a structure whereby individuals are gifted with an education, and then coerced to pay for it via the tax system. A glaring loophole is emigration – if an individual acts in their own best interests by, say, taking a job os they don’t have to pay the HECS tax – by policy design. So Sukrit is engaging to tax avoidance, not evasion, by following his course of action. If the government is stupid enough to have stupid rules, that’s their problem. All this talk of ‘moral obligation’ is just cant.

    Damien – you’re smarter than that. ‘how should we fund the courts, the police, the defence forces and the like?’ by coercive taxation – mind you we should spend a lot more on these things.

  31. Andrew: So I did. What I meant however, was I did not ask for them to interfere with the customer-business relationship. The government decided to instate HECS, they decided students who get a certain ENTER are eligible for it, they also decided what price they would pay the university, they also crowded out the private market in student loans and monopolised a certain type of income-contingent loan, and then they left eligible students with the ‘choice’ of choosing between HECS and giving that up to pay full-fees, knowing well that the parents of these students had been taxed unnecessarily highly and had probably not received their fair share of services in return. And that the students would be probably be taxed quite highly in the future too (if their arts degrees are worth anything given the oversupply of arts students keen to take up the extremely generous HECS!).

  32. In short, the government has, through force of legislation, been distorting the choices available to students from the very beginning. They did not physically coerce them into a HECS contract, but their policies limited their options.

    Supporting the ATO forcibly recollecting from those who have moved o/s or those declaring less than they earn is then the same as supporting more of that tainted taxpayer money being put into post-hoc fixing of this situation. The government has no moral authority given they set up the ‘rules of the game’ – and the rules lack the variety of a genuine marketplace.

    If enough people avoid paying, there could be a budget revenue shortfall. It might save future taxpayers money because of political backlash (due to deficit) leading to conservative spending. The morally just goal of sending the government a message (stop distorting the system and financing your distortionary schemes through coercively collected taxes!) would be achieved.

    NB: I would not be so righteous in my view that I would be doing a good thing by considering fleecing the government if I did not think the government =/= the taxpayer.

  33. Pingback: Taxation, universities, evil « Thoughts on Freedom

  34. Jason Soon says:

    Sukrit’s position is silly libertarian moralism. If you’re going to reduce eveything down to coercion then why bother with economic analysis in the first place?

    HECS does’t cost much, it’s one of the most efficient programs around. It does seem to address a genuine market failure.

  35. Jason Soon says:

    Christ, Surkrit
    No wonder you think Gandhi is a liberal. You’re not a libertarian, you’re a nihilist.

  36. Sinclair,

    I was just taking Sukrit’s argument to its logical conclusion and then pointing out a major problem with it. The fact of the matter is that we need people to pay taxes in order to fund government services and very few people believe that we can completely do away with government services. This gets back to one of my pet hobby horses. It seems to me that extreme libertarian positions are every bit as misguided as extreme interventionist positions.

    Regards,

    Damien.

  37. IIRC, HECS is very similar to the scheme outlined by Milt in Capitalism and Freedom. It’s got pretty good credentials, Sukrit. Although I do think that Sinclair is right when classifying moving overseas as tax avoidance, rather than tax evasion. The first is grey, the second is, well, yeah – even lawyers don’t like to go there.

  38. HECS is a loan, and if you take out a loan you should repay it. Even if it is the government giving the loan.

    It is, however, stupid of the government to make the repayment of the loan dependent on working in Australia. Sukrit is pointing out this stupidity and that’s a reasonable thing to do. It certainly doesn’t make him a nihilist Jason. You’re just using this opportunity to bash a libertarian so that you look more “reasonable” and “centrist” to the chattering class. ;p

    skepticlawyer — tax avoidance isn’t grey. It’s perfectly legal and I think moral.

    This debate has gone sideways from what AL intended. Sukrit, please re-open comments on this topic at the ALS blog.

  39. Sick of long-winded back-and-forths says:

    You idiots. Sometimes (often) the stupid discussions here frustrate me. Take the damn scholarship, of course, becuase if you don’t – then someone further on the left will. It is even your “duty” to take it – not to waste a morsel the enemy drops along their way!

    You didn’t decide to confiscate the money from taxpayers. The over-sized government did. So you shouldn’t feel responsible. You certainly cannot locate the owner of the money (minute and varying fractions of tax-paying individuals) but as mentioned earlier, you can do something honourable in their name. That is do your best to protect individuals and their liberty.

  40. Yobbo says:

    “Sinclair, you make a good theoretical point but do you really think bank financing would be a better policy than an income-contingent loans scheme? I can’t see that the banks would ever go for income-contingent lending.”

    This is simply not true. Banks would be very willing to subsidise income contigent loans (a the right interest rate) to students that were undertaking worthwhile courses (e.g Medicine, Law, Engineering, Science). They would not be willing to subsidise worthless degrees like arts and business.

    How is this a problem? Australia has far too many graduates in the pretend degrees already. University should not be an alternative to welfare. Remove the free loans and it stops, overnight.

  41. Sir Humphrey says:

    First things first – I apologise again to Andrew for taking this thread off topic. I am very interested to see what you come up with.

    Yobbo, you will see in my comment at 11:30 yesterday (http://andrewleigh.com/?p=1250#comment-32874), that I acknowledged that bank lending could work, but some form of underwriting is probably still needed. The problem with lending for investments in “human capital” is that such assets don’t make very good collateral.

  42. “If you’re going to reduce eveything down to coercion then why bother with economic analysis in the first place?”

    You know, I wouldn’t mind this so much. 37.7 percent of economists in America want the minimum wage increased, while 46.8 percent want it eliminated. If the 37.7% considered the moral implications of their position they might not be so willing to support minimum wages. Forget the economics 😉

    On the loans: the National Bank of Australia currently lends up to $20,000 at about 10% to students, a loan which is repayable after graduation.

  43. “I was just taking Sukrit’s argument to its logical conclusion and then pointing out a major problem with it.”

    I’m just stating the thought processes that many people would do internally. Not everyone would evade tax because it’s not in everyone’s interest to do so. So public services are safe, because there will always be enough people who don’t have a strong enough incentive after weighing up the costs and benefits of evading tax.

  44. Jono says:

    Many of my friends have moved overseas and left behind a fat HECS debt.

    Does anyone here dare suggest that they have a social duty to live and work in Australia until every cent is repaid ?

    They didn’t move overseas to avoid paying it, they simply had better opportunities and careers elsewhere.

  45. Sacha says:

    “Andrew N, I consider it a moral obligation to do what you can to minimise what you pay to the government.”

    Hmmmm – the Australian population, through its govt, has helped you get through university via HECS – I would think that the moral obligation is to pay it back, don’t you?

  46. Sacha says:

    Otherwise you’re a freeloader.

  47. Sir Humphrey says:

    Jono: “Does anyone here dare suggest that they have a social duty to live and work in Australia until every cent is repaid ?”

    No, of course not. They can live and work where they like. But if you take out a bank loan in Australia you are expected to pay it back whether you live here or not, so the same ought to apply to hecs. In other words, they don’t have to live here, but they ought to pay off their debt anyway, and this is an aspect of the current hecs system that ought to be fixed.

  48. Jono says:

    No, of course not. They can live and work where they like. But if you take out a bank loan in Australia you are expected to pay it back whether you live here or not, so the same ought to apply to hecs.

    If you take out a bank loan, you receive the full value of the loan and repay it over time.

    When it comes to university education, the government contributes roughly 3 dollars for every 1 dollar that a student contributes. And then this 1 dollar itself can be borrowed at a zero interest rate loan with no repayments needed till the student earns a high income.

    Its not our fault that the government decides to finance ventures with such a low or negative return. A large portion of those loans would be written off as people travel overseas, or fail to earn above a certain threshold, or become sick or die.

    But all in all, I agree that its generally accepted that a person should repay a loan, even if it is to government. However I don’t see the logic in the entire public being taxed so heavily to fund education regardless of whether they consume it or not.

Comments are closed.