Peer E¤ects on Criminal Behavior. Evidence from the homeless

This paper investigates the in‡uence of peers on criminal behavior, using original data I collected by interviewing homeless people in Milan. Information on friends’names was elicited, which allows to map each respondent’s network. Each individual was also asked to report his criminal status prior to becoming homeless. To estimate the causal e¤ects of network size and of the share of criminal friends on (subsequent) criminal behavior, I rely on two instruments. The …rst is the share of rainy days since the individual has become homeless: rainfall fosters concentration of homeless individuals in sheltered places and increases the probability of meetings. The second instrument is the fraction of inmates released by Milan’s authorities during one’s period as homeless, which a¤ects the supply of criminal potential friends. I …nd that the probability of arrest decreases by 16 percentage points with the network size, but it increases by 19 percentage points with the share of criminal friends in the group. JEL Classi…cation: J0; K42 Keywords: Peer e¤ects, crime, homeless University College London and Centre for Research and Analysis of Migration (CReAM). Department of Economics, 30 Gordon Street, London WC1H OA. Phone: +44-(0)2-076795451. Fax: +44-(0)2-076791068. Email: [email protected]. This project required the collaboration of many people. First of all, I am deeply indebted with Michela Braga, my co-worker during all stages of the project. The data collection bene…ts from the help of many volunteers, in particular from the Italian Red Cross, Caritas and Opera Cardinal Ferrari. I wish to thank Eliana La Ferrara and Edward Miguel for their valuable comments and suggestions. I also bene…t from the inputs by Emilio Calvano, Stefano Dellavigna, Gunther Fink, Masayuri Kudamatsu, Enrico Moretti, Tommaso Nannicini, Steve Pischke, Imran Rasul, David Stromberg and seminar participants at Berkeley, Bocconi University, University College London and IIES at Stockholm University. I thank the Regional Agency for the Environmental Protection and the Meteorological Service of the Military Aereonautics for making rainfall data available to me and correctional facilities of S.Vittore, Bollate and Opera to provide me administrative data on inmates. I thank Marzio Barbaglio for sharing data on police force deployment in Italy. Financial support from the Empirical Research in Economics (ERE) and Fondazione Rodolfo De Benedetti (FRdB) is gratefully acknowledged. All errors are my own.