Search Results
Working Paper
Information Production, Misconduct Effort, and the Duration of Financial Misrepresentation
We examine the link between information produced by auditors and analysts and fraud duration. Using a hazard model, we analyze misstatement periods related to SEC accounting and auditing enforcement releases (AAERs) between 1982 and 2012. Results suggest that misconduct is more likely to end just after firms announce an auditor switch or issue audited financial statements, particularly when the audit report contains explanatory language. Analyst following increases the fraud termination hazard. However, increases (decreases) in analyst coverage have a negative (positive) marginal impact on ...
Working Paper
Does changing employers’ access to criminal histories affect ex-offenders’ recidivism?: evidence from the 2010–2012 Massachusetts CORI Reform
This paper examines how changes in employers? access to job applicants? criminal histories affect ex-offender recidivism. We use extensive state administrative data on individual criminal histories spanning the 2010?2012 Massachusetts Criminal Offender Record Information (CORI) Reform, widely regarded as landmark legislation governing access to individuals? criminal information. The CORI Reform: i) banned inquiring about criminal history on initial job applications, and ii) broadened the list of groups eligible to use the state?s criminal records repository while simultaneously restricting ...
Working Paper
Financial regulations and price inconsistencies across bitcoin markets
We document systematic differences in bitcoin prices across 11 different markets representing 26% of global bitcoin trade volume. These differences must ? due to the identical nature of all bitcoin ? result from characteristics of markets themselves. We examine differences across the markets and find that those which do not require customer identification for establishing an account are more likely to deviate from representative market prices than those which do. This implies that standard financial regulations, specifically know-your-customer regulations, can have a non-negligible impact on ...
Working Paper
The Hidden Effects of Algorithmic Recommendations
Algorithms are intended to improve human decisions with data-driven predictions. However, algorithms provide more than just predictions to decision-makers—they often provide explicit recommendations. In this paper, I demonstrate these algorithmic recommendations have significant independent effects on human decisions. I leverage a natural experiment in which algorithmic recommendations were given to bail judges in some cases but not others. Lenient recommendations increased lenient bail decisions by 40% for marginal cases. The results are consistent with algorithmic recommendations making ...
Working Paper
Punishment and Crime: The Impact of Felony Conviction on Criminal Activity
This paper uses increases in felony larceny thresholds as a negative shock to felony conviction probability to examine the impact of punishment severity on criminal behavior. In the theft value distribution between old and new larceny thresholds (“response region”), higher thresholds cause a 2 percent increase in the average larceny value within 120 days of enactment. However, within five years of enactment, response region average larceny values and rates decline 2 percentand 13 percent, respectively, in low-wage areas. Thus, under certain market conditions, smaller expected penalties ...
Working Paper
Black Mayors and Crime
Local elections are often contested on the grounds of public safety, but do elected officials have any power to curb crime? Black mayors have particular interest in the issue because Black communities are victimized by high levels of crime and fragile police community relations. Using data on elections of first-time Black mayors, I find that police forces add more Black officers, a finding that is especially true for mayors with executive authority. Officers arrest 48 fewer potential Black offenders per 10,000 Black residents for crimes where they have the ability to exercise discretion, a ...
Speech
The rewards of an ethical culture
Remarks at the Bank of England, London.
Working Paper
Can Reputation Discipline the Gig Economy? Experimental Evidence from an Online Labor Market
Just as employers face uncertainty when hiring workers, workers also face uncertainty when accepting employment, and bad employers may opportunistically depart from expectations, norms, and laws. However, prior research in economics and information sciences has focused sharply on the employer?s problem of identifying good workers rather than vice versa. This issue is especially pronounced in markets for gig work, including online labor markets, where platforms are developing strategies to help workers identify good employers. We build a theoretical model for the value of such reputation ...
Report
Crime, house prices, and inequality: the effect of UPPs in Rio
We use a recent policy experiment in Rio de Janeiro, the installation of permanent police stations in low-income communities (or favelas), to quantify the relationship between a reduction in crime and the change in the prices of nearby residential real estate. Using a novel data set of detailed property prices from an online classifieds website, we find that the new police stations (called UPPs) had a substantial effect on the trajectory of property values and certain crime statistics since the beginning of the program in late 2008. We also find that the extent of inequality among residential ...
Working Paper
The Effect of Undocumented Immigration and Border Enforcement on Crime Rates along the U.S.-Mexico Border
In the 1990s, the U.S. border led the nation in the decline of property-related crimes, while violent crime rates fell twice as fast in the U.S. as in the median border county. This paper asks how changes in undocumented immigration and border enforcement have played a role in generating these divergent trends. We find that while migrant apprehensions are correlated with a greater incidence of violent crime, they are not systematically associated with higher rates of property crime. Border patrol enforcement is associated with lower property crime rates but higher violent crime. ...