An Analysis of Arrests regarding Illegal Drugs: The Determinants and Policy Implications

I Introduction Crime recently has become a major issue for public debate and target for reform in the search for better neighborhood security and to reduce property losses. Against this background, the Crime Bill has been passed which appropriates approximately $30 billion, to hire 100,000 more police officers, ban several types of assault weapons, and build more prisons so that serious felons are not released early because of lack of space. Among different types of crimes, the sale and use of illegal drugs has probably received the most attention and become the number one crime issue. During the period of 1980-1991, arrests for drug abuse violations per 100,000 population in the U.S. rose from 256 to 401, or by 56.5% compared with a 27.0% increase for violent crime and a -4.0% change in the property crime rate. The present paper is organized in the following manner. Literature is reviewed and summarized in the following section. The theoretical framework and the model are presented in the third section. Empirical results including the estimated regression, hypothesis tests, and other relevant statistics are presented and interpreted in the fourth section. A summary and conclusions make up the last section. II Literature Survey The war on drugs has caused concerns in some states. An increasing proportion of prison admissions relate to drug offenses. To accommodate increased drug inmates, some prisoners have to be released early, resulting in a declining time served in jail. The fight against illegal drugs also takes away part of the police resources used to deter violent and property crimes. Phillips (1992) studied drug and related problems in California. Courts are swamped with drug related cases, civil cases are delayed, and the criminal system is critically in trouble. Drug abuse arrests have increased more rapidly than the arrests for the combined total of seven major offenses in the Federal Bureau of Investigation (FBI) crime index.(1) By 1988, the ratio of drug abuse arrests to arrests for the FBI crime index increased to 0.65. Drug abuse arrests have contributed to a 25% increase in new jail admissions during the periods of 1974-82 and 1982-87. The share of drug arrests in new admissions grew from 8.5% in 1981 to 35.4% in 1988. Because of crowded jails, in Los Angeles county the number of felons paroled doubled between 1984 and 1989. The major findings of previous studies using regression or statistical analysis are summarized in Table 1. It appears that the study of the determinants of drug abuse arrests is appropriate for the following reasons. First, none of the above studies examined the determinants of drug abuse crime across states. Indeed, the Uniform Crime Reports did not publish data on drug abuse arrests by state until 1991. Also, some of the empirical results are inconclusive and different signs or insignificant coefficients were found. For example, Mikesell and Pirog-Good (1990) found a positive sign for police force, whereas Deutsch, Hakim, and Spiegel (1990) found the sign of the expenditure on police force to be negative. Young (1993) showed that the unemployment rate and property crime have a negative but insignificant relationship, whereas Mikesell and Pirog-Good (1990) and Deutsch, Hakim, and Spiegel (1990) found a positive and significant coefficient of the unemployment rate. Mikesell and Pirog-Good (1990) found that the income variable is positive and significant, but Deutsch, Hakim, and Spiegel (1990) found that the income variable is positive but insignificant and that the coefficient of schooling as represented by the percent of population graduating from public and private high schools is negative but insignificant. III The Model Based on previous studies and an economic theory of crime (Becker, 1968) which involves the concepts of incentives, the certainty and severity of punishment if caught, the allocation of time between crime and work and the opportunity cost, drug abuse arrests can be expressed as [DRUG. …