New Releases by Steven D. Levitt

"This paper describes basic facts regarding the black-white test score gap over the first four years of school. Black children enter school substantially behind their white counterparts in reading and math, but including a small number of covariates erases the gap. Over the first four years of school, however, blacks lose substantial ground relative to other races; averaging .10 standard deviations per school year. By the end of third grade there is a large Black-White test score gap that cannot be explained by observable characteristics. Blacks are falling behind in virtually all categories of skills tested, except the most basic. None of the explanations we examine, including systematic differences in school quality across races, convincingly explain the divergent academic trajectory of Black students"--National Bureau of Economic Research web site.

A wide range of social indicators turned sharply negative for Blacks in the late 1980s and began to rebound roughly a decade later. We explore whether the rise and fall of crack cocaine can explain these patterns. Absent a direct measure of crack cocaine''s prevalence, we construct an index based on a range of indirect proxies (cocaine arrests, cocaine-related emergency room visits, cocaine-induced drug deaths, crack mentions in newspapers, and DEA drug busts). The crack index we construct reproduces many of the spatial and temporal patterns described in ethnographic and popular accounts of the crack epidemic. We find that our measure of crack can explain much of the rise in Black youth homicides, as well as more moderate increases in a wide range of adverse birth outcomes for Blacks in the 1980s. Although our crack index remains high through the 1990s, the deleterious social impact of crack fades. One interpretation of this result is that changes over time in behavior, crack markets, and the crack using population mitigated the damaging impacts of crack. Our analysis suggests that the greatest social costs of crack have been associated with the prohibition-related violence, rather than drug use per se.

Donohue and Levitt (2001) present a number of analyses that suggest a causal link between legalized abortion and reductions in crime almost two decades later when the cohorts exposed to legalized abortion reach their peak crime years. Joyce (2003) challenges that finding. In this paper, we demonstrate that Joyce''s failure to uncover a negative relationship between abortion and crime is a direct consequence of his decision to focus exclusively on the six-year period 1985-90 without including adequate controls for the crack epidemic. We provide empirical evidence that crack hit the high-abortion early legalizing states harder and earlier. We then demonstrate that using precisely the same treatment and control groups as Joyce, but extending the data analysis to encompass the lifetime criminal experiences (as opposed to an arbitrary six-year window), the evidence strongly supports the hypothesis that legalized abortion reduces crime. We also show that our original results are robust to focusing on only the cohorts born immediately before or after Roe v. Wade. The data suggest that ease of access to abortion, rather than simply de jure legalization, is a critical determinant of the extent of the crime reduction.

School choice has become an increasingly prominent strategy for urban school districts seeking to enhance academic achievement. Evaluating the impact of such programs is complicated by the fact that a highly select sample of students takes advantage of these programs. To overcome this difficulty, we exploit randomized lotteries that determine high school admission in the Chicago Public Schools. Surprisingly, we find little evidence that attending sought after programs provides any benefit on a wide variety of traditional academic measures, including standardized test scores, attendance rates, course-taking, and credit accumulation. This is true despite the fact that those students who win the lotteries attend better high schools along a number of dimensions, including higher peer achievement levels, higher peer graduation rates, and lower levels of poverty. We do, however, uncover evidence that attendance at such schools may improve a subset of non-traditional outcome measures, such as self-reported disciplinary incidences and arrest rates.

In most settings, it is difficult to measure discrimination, and even more challenging to distinguish between competing theories of discrimination (taste-based versus information-based). Using contestant voting behavior on the television game show Weakest Link, one can in principle empirically address both of these questions. On the show, contestants answer questions and vote off other players, competing for a winner-take-all prize. In early rounds, strategic incentives encourage voting for the weakest competitors. In later rounds, the incentives reverse, and the strongest competitors become the logical target. Controlling for other observable characteristics including the number of correct answers thus far, both theories of discrimination predict that in early rounds, excess votes will be made against groups targeted for discrimination. In later rounds, however, taste-based models predict continued excess votes, whereas statistical discrimination predicts fewer votes against the target group. Empirically, I find some evidence of information-based discrimination towards Hispanics (i.e., other players perceive them as having low ability) and taste-based discrimination against older players (i.e., other players treat them with animus). There is little in the data to suggest discrimination against women and Blacks

In previous research, a substantial gap in test scores between White and Black students persists, even after controlling for a wide range of observable characteristics. Using a newly available data set (Early Childhood Longitudinal Study), we demonstrate that in stark contrast to earlier studies, the Black-White test score gap among incoming kindergartners disappears when we control for a small number of covariates. Over the first two years of school, however, Blacks lose substantial ground relative to other races. There is suggestive evidence that differences in school quality may be an important part of the explanation. None of the other hypotheses we test to explain why Blacks are losing ground receive any empirical backing. The difference between our findings and previous research is consistent with real gains made by recent cohorts of Blacks, although other explanations are also possible.

We develop an algorithm for detecting teacher cheating that combines information on unexpected test score fluctuations and suspicious patterns of answers for students in a classroom. Using data from the Chicago Public Schools, we estimate that serious cases of teacher or administrator cheating on standardized tests occur in a minimum of 4-5 percent of elementary school classrooms annually. Moreover, the observed frequency of cheating appears to respond strongly to relatively minor changes in incentives. Our results highlight the fact that incentive systems, especially those with bright line rules, often induce behavioral distortions such as cheating. Statistical analysis, however, may provide a means of detecting illicit acts, despite the best attempts of perpetrators to keep them clandestine.

The number of prisoners incarcerated on drug-related offenses rose fifteen-fold between 1980 and 2000. This paper provides the first systematic empirical analysis of the implications of that dramatic shift in public policy. We show that the increase in drug prisoners led to reductions in expected time served for other crimes, especially for less serious offenses. Reductions in time served, however, increased other crimes by no more than a few percent. Moreover, incarcerating drug offenders is found to be almost as effective in reducing violent and property crime as locking up other types of offenders. We estimate that cocaine prices are 10-15 percent higher today as a consequence of increases in drug punishment since 1985. Based on previous estimates of the price elasticity of demand for cocaine, this implies a reduction in cocaine consumed of as much as 20 percent

Current education reform proposals involve improving educational outcomes through forms of market-based competition and expanded parental choice. In this paper, we explore the impact of choice through open enrollment within the Chicago Public Schools (CPS). Roughly half of the students within CPS opt out of their assigned high school to attend other neighborhood schools or special career academies and magnet schools. Access to school choice dramatically increases student sorting by ability relative to neighborhood assignment. Students who opt out are more likely to graduate than observationally similar students who remain at their assigned schools. However, with the exception of those attending career academies, the gains appear to be largely spurious driven by the fact that more motivated students are disproportionately likely to opt out. Students with easy geographical access to a range of schools other than career academies (who presumably have a greater degree of school choice) are no more likely to graduate on average than students in more isolated areas. We find no evidence that this finding can be explained by negative spillovers to those who remain that mask gains to those who travel. Open enrollment apparently benefits those students who take advantage of having access to vocational programs without harming those who do not.

Although the theoretical literature on corruption is well developed, empirical work in this area has lagged because it has proven difficult to isolate corrupt behavior in the data. In this paper, we look for evidence of corruption in an unlikely place: the highest echelons of Japanese sumo wrestling. This paper provides strong statistical evidence documenting match rigging in sumo wrestling. A non-linearity in the incentive structure of promotion leads to gains from trade between wrestlers on the margin for achieving a winning record and their opponents. We show that wrestlers win a disproportionate share of the matches when they are on the margin. Increased effort can not explain the findings. Winning on the bubble is more frequent when the two competitors have met often in the past. Success on the bubble tends to rise over the course of a wrestler''s career, but declines in his last year, consistent with the game theoretic predictions. Wrestlers who are victorious when on the bubble lose more frequently than would be expected the next time they meet that opponent, suggesting that part of the payment for throwing a match is future payment in kind. Systematic differences across wrestling stables suggest that the stables play a role in facilitating the corruption. In times of increased media scrutiny, the match rigging disappears.

We offer evidence that legalized abortion has contributed significantly to recent crime reductions. Crime began to fall roughly 18 years after abortion legalization. The 5 states that allowed abortion in 1970 experienced declines earlier than the rest of the nation, which legalized in 1973 with Roe v. Wade. States with high abortion rates in the 1970s and 1980s experienced greater crime reductions in the 1990s. In high abortion states, only arrests of those born after abortion legalization fall relative to low abortion states. Legalized abortion appears to account for as much as 50 percent of the recent drop in crime

Race has long been recognized as playing a critical role in policing. In spite of this awareness, there has been virtually no previous research attempting to quantitatively analyze the issue. In this paper, we examine the relationship between the racial composition of a city''s police force and the racial patterns of arrests and crime. Increases in the number of minority police are associated with significant increases in arrests of whites, but have little impact on arrests of non-whites. Similarly arrests of non-whites, but do not systematically affect the number of white arrests. The race of police officers has a less clear-cut impact on crime rates. It appears that own-race policing may be more effective in reducing property crime, but no systematic differences are observed for violent crime. These results are consistent either with own-race policing leading to fewer false arrests or greater deterrence. In either case, own-race policing appears more "efficient" in fighting property crime.

We analyze a unique data set detailing the financial activities of a drug-selling street gang on a monthly basis over a four-year period in the recent past. The data, originally compiled by the gang leader to aid in managing the organization, contain detailed information on both the sources of revenues (e.g. drug sales, extortion) and expenditrues (e.g. costs of drugs sold, weapons, tribute to the central gang organization, wages paid to various levels of the gang). Street-level drug dealing appears to be less lucrative than is generally though. We estimate the average wage in the organization to rise from roughly $6 per hour to $11 per hour over the time period studied. The distribution of wages, however, is extremely skewed. Gang leaders earn far more than they could in the legitimate sector, but the actual street-level dealers appear to earn less than the minimum wage throughout most of our sample, in spite of the substantial risks associated with such activities (the annual violent death rate in our sample is 0.07), There is some evidence consistent both with compensating differentials and efficiency wages. The markup on drugs suggests that the gang has substantial local market power. Gang wars appear to have an important strategic component: violence on another gang''s turf shifts demand away from that area. The gang we observe responds to such attacks by pricing below marginal cost, suggesting either economic punishment for the rival gang or the presence of switching for users that makes market share maintenance valuable. We investigate a range of alternative methods for estimating the willingness of gang members to accept risks of death, all of which suggest that the implicit value that gang members place on their own lives is very low.