This is an outgrowth of an invited paper presented at the American Economic Association Meetings,

This paper empirically examines perceptions of the criminal justice system held by young males using longitudinal survey data from the recent National Longitudinal Survey of Youth 1997 Cohort and the National Youth Survey. While beliefs about the probability of an arrest are positively correlated with local official arrest rates, they are largely idiosyncratic and unresponsive to information about the arrests of other random individuals and local neighborhood conditions. There is little support, therefore, for the `broken windows ' theory of Wilson and Kelling (1982). Yet, perceptions do respond to changes in an individual's own criminal and arrest history. Young males who engage in crime but are not arrested revise their perceived probability of arrest downward, while those who are arrested revise their probability upwards. Beliefs respond similarly to changes in a sibling's criminal and arrest history. The perceived probability of arrest is then linked to subsequent criminal behavior. Cross-sectionally, youth with a lower perceived probability of arrest are significantly more likely to engage in crime during subsequent periods. Following an arrest,

This paper empirically examines perceptions of the criminal justice system held by young males using longitudinal survey data from the recent National Longitudinal Survey of Youth 1997 Cohort and the National Youth Survey. While beliefs about the probability of an arrest are positively correlated with local official arrest rates, they are largely idiosyncratic and unresponsive to information about the arrests of other random individuals and local neighborhood conditions. There is little support, therefore, for the `broken windows ' theory of Wilson and Kelling (1982). Yet, perceptions do respond to changes in an individual's own criminal and arrest history. Young males who engage in crime but are not arrested revise their perceived probability of arrest downward, while those who are arrested revise their probability upwards. Beliefs respond similarly to changes in a sibling's criminal and arrest history. The perceived probability of arrest is then linked to subsequent criminal behavior. Cross-sectionally, youth with a lower perceived probability of arrest are significantly more likely to engage in crime during subsequent periods. Following an arrest,

This paper develops a model of crime analyzing how such behavior is associated with individual and neighborhood poverty. The model shows that even under relatively minimal assumptions, a connection between individual poverty and both property and violent crimes will arise, and moreover, "neighborhood " e¤ects can develop, but will di¤er substantially in nature across crime types. A key implication is that greater economic segregation in a city should have no e¤ect or a negative e¤ect on property crime, but a positive e¤ect on violent crime. Using IV methods, I show this implication to be consistent with the empirical evidence.