Essays in applied microeconomics /

Abstract

This dissertation consists of three essays on the effects that macroeconomic variables have on the microeconomic behavior of impoverished peoples. The first essay, "Are Gangs a Substitute for Legitimate Employment? Investigating the Impact of Labor Market Effects on Gang Affiliation," considers the relationship of gang participation to local economic conditions. The purpose of the study is to ascertain whether gang participation is the product of rational decision making. There is a statistically significant and positive relationship between gang participation and the local unemployment rate. These results indicate that potential gang members consider labor market opportunities when making the gang participation decision. The second essay entitled, "The Effects of Inflation and Demographic Change on Property Crime: A Structural Time-Series Approach," primarily considers the effect of inflation on property crime rates. Previous literature has focused on the relationship between unemployment rates and aggregate crime rates. The principal finding of the essay is that inflation has a statistically significant, positive, and persistent effect on property crime in the United States. The concluding essay "Declining Maize Prices, Biodiversity, and Subsistence Farming in Mexico," investigates the behavioral response of subsistence farmers in Mexico to fluctuations in the market price for maize. The principal finding is that since subsistence farmers purchase goods in the market place decreases in the price of maize will generate an increase in their maize production. A theoretical model, which makes use of a Stone-Geary utility function, is developed to explain the dominant income effect.