Applied Microeconomics Group
The applied microeconomics group covers a variety of areas including labour economics and industrial organisation, as well as the economics of sport and crime. Current and recent research projects in this area include:
Applied Microeconomics Group
Funder / Sponsor
Crime and the success of bank robberies.
Neil Rickman, Robert Witt and Barry Reilly (Sussex)
This seminal study uses bank-level data for Britain to model factors that determine the proceeds from a bank robbery. The econometric evidence suggests an important role for the number of bank raiders and the use of a firearm. The presence of a fast-rising security screen is found to exert the strongest attenuating effect on the financial rewards to bank robbery activity. Our analysis suggests that most of the impact of this security device is through its reduction in the probability that a raid is successful. Our preferred econometric estimates suggest that the installation of such a system in retail banking outlets diminishes the probability of a successful raid by about one-half relative to the sample average, and reduces the average monetary loss per raid by just over £24,000. In addition, our analysis also reveals that the average internal rate of return for a bank investing in a fast-rising security screen is low, and the monetised penalty necessary to deter a putative perpetrator is modest.
Disciplinary sanctions and racial discrimination in football.
Robert Witt and Barry Reilly (Sussex)
This paper assesses the evidence for racial differences in the accumulation of disciplinary sanctions in professional football using data drawn from five recent seasons of the English Premiership. A relatively rich data source was used to construct a unique dataset for this study. The data have the significant advantage of being able to identify, inter alia, the player’s age, club, field position, number of games played, time played per game, and the number of disciplinary cards received. These data were merged with data from other sources to identify the racial affiliation of the player across four separate categories (viz., white, black, mixed race, and Asian). On the basis of our preferred econometric approach, no evidence of unfair treatment of players from racial minority groups in the accumulation of disciplinary cards.
Inequality, technical change and job polarisation
This study shows gender bias in technology driven skill polarisation. Between 1997 and 2006 the demand for women shows hollowing out across high, medium and low education groups, as a consequence of technical change. This was not the case for men. Decomposing the fall in the gender pay gap shows further evidence for gender biased technological change. For moderate and complex computer users the fall in the gender pay gap remains largely unexplained suggesting gender biased demand shifts have significantly contributed to the closing of the gender pay gap.
International comparisons of intergenerational mobility
This project, in contrast to most other studies in this area, considers work on income, social class, social status and education with observations of mobility included from 65 countries. If our question of interest is “How does the importance of the influence of parental background for children’s outcomes differ across countries?” it does not seem reasonable to concentrate only on one measure of background and outcome. The research shows that the different measures used tend to be fairly well correlated, with South America and southern Europe having low mobility and the Nordic nations being rather more mobile. Measures of the association of social class across generations (social class fluidity) are the exception to this, with if anything, a negative relationship between the country rankings on these measures and others. The possible reasons for these differences are explored in the paper.
The Sutton Trust and the Carnegie Corporation of New York
Panel data analysis of over-education
Jo Lindley and Steven McIntosh (Sheffield)
Uses panel data to investigate the impact and permanence of over-education wage penalties. The study shoes that over-education is permanent for many workers since around 50 percent of workers over-educated in 1991 remain so in 2005. However, these workers are of lower quality compared to the 25 percent who find a match within five years of being over-educated. Finally, there is a significant scarring effect for non-graduate workers over-educated in 1991. This is not the case for university graduates who manage to find a match within five years
Parental qualifications and child poverty in 2020
Jo Lindley and Andy Dickerson (Sheffield)
This report examines the potential pay-off in terms of child poverty for a general rise in skills levels in the adult population as outlined in the Leitch Review. Higher skill levels are associated with greater employment levels and better jobs, and this can all help to reduce child poverty. We estimate that the impact of achieving the Leitch ambitions could contribute to between a 2 and 5 percentage point reduction in the incidence of child poverty by 2020.
Joseph Rowntree Foundation
Police, Crime and the July 2005 Terror Attacks
Robert Witt, Mirko Draca (LSE) and Steve Machin (UCL)
In this paper we study the causal impact of police on crime by looking at what happened to crime and police before and after the terror attacks that hit central London in July 2005. The attacks resulted in a large redeployment of police officers to central London as compared to outer London – in fact, police deployment in central London increased by over 30 percent in the six weeks following the July 7 bombings, before sharply falling back to pre-attack levels. During this time crime fell significantly in central relative to outer London. Study of the timing of the crime reductions and their magnitude, the types of crime which were more likely to be affected and a series of robustness tests looking at possible biases all make us confident that our research approach identifies a causal impact of police on crime. The instrumental variable approach we use uncovers an elasticity of crime with respect to police of approximately -0.3, so that a 10 percent increase in police activity reduces crime by around 3 percent.