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The impact of absolute inequality on pecuniary and violent crime rates

Thomas Goda, Alejandro Torres, and Angélica Sánchez•

 

1. Research Question:
Does absolute income inequality foster crime?

2. Summary:
Our study is the first cross-country study that tests if absolute income differences within-countries foster crime (taking into account United Nations Office on Drugs and Crime (UNODC) data for 106 developed and developing countries). We find that both absolute and relative income inequalities are key factors to explain differences in crime rates across countries. The difference between absolute and relative inequality is that, whereas relative inequality refers to proportional income differences (measured by the Gini coefficient), the degree of absolute inequality depends on the magnitude of income differences in absolute monetary terms (measured by the variance). According to our results, absolute income differences are especially important to explain theft and burglary. This finding supports the standard argument of economic models that increases in the absolute difference between the legal income of the poor and the possible income gains from crimes against the rich generate strong incentives to commit pecuniary crime. On the contrary, relative inequality seemingly is more important to explain assault and rape rates. Our results furthermore suggest that in the case of robbery absolute and relative inequalities are of similar importance.

3. Implications:

  • To lower crimes rates the reduction of income inequality is crucial. In the case of pecuniary crimes (i.e. theft and burglary) absolute income differences are especially important, while non-pecuniary violent crime rates (i.e. assault and rape) depend more significantly on proportional income differences.
  • Economic growth does not lead to lower pecuniary crime rates. Pecuniary crime rates increase if absolute income differences increase. Given that GDP per capita growth leads to higher levels of absolute inequality, economic growth on its own does not lead to lower crime rates.
  • Future research on absolute inequalities is important. So far most economic inequality research concentrates on relative inequalities. Our results show that it is important to intensify research regarding the determinants of changes in absolute inequalities as well as their resulting economic effects.

Community standards of deception

Emma Edelman Levine

1. Research Question 

When is deception perceived to be ethical? Through a large inductive study, and fourteen experiments, with over 2000 participants, I develop and test a descriptive moral theory to shed light on this fundamental question.

 

2. Short Summary of conclusions 

Deception is perceived to be ethical when honesty causes unnecessary harm. Perceptions of “unnecessary harm” are influenced by two key dimensions: the degree to which honesty will harm an individual at the moment of communication, and the ultimate necessity of truth, which is a factor of the meaningfulness, potential use, and objectivity of the honest information. Perceptions of “unnecessary harm” dictate nine implicit rules – pertaining to the targets, topics, and timing of a conversation – that specify the systematic circumstances in which deception is perceived to be ethical. 

Figure 1. Theoretical framework:

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Figure 2. The implicit rules of deception

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3. #1 Implication for Practice 

 This research highlights the circumstances in which truthful information will not be shared with others and the circumstances in which honesty will be penalized. Specifically, individuals are likely to be penalized for violating implicit moral rules rather than being dishonest. For example, providing honest feedback at the wrong time (e.g., when it can no longer be implemented) or in the wrong place (e.g., in front of others) is likely to elicit more anger and distrust than providing dishonest feedback.

4. #2 Implication for Practice 

This research also has important implications for the way we discuss and teach ethics. Leaders, parents, and managers often preach about the importance of honesty without acknowledging the importance of interpersonal harm and care. Instead, ethics education could focus on training individuals to integrate honesty and care by discussing and exploring the implicit rules of deception.

5. #1 Implication for Research

This research expands our understanding of behavioral ethics by providing evidence of the centrality of harm over veracity in human communication. Whereas prior research has assumed that deception itself is unethical, I demonstrate that unnecessary harm is the key driver of moral judgments of deception and I rule out a series of alternative mechanisms that have been proposed in normative ethics and moral psychology (e.g., perceptions of autonomy, self-interest, and moral duty). 

6.     #2 Implication for Research

In this research, I also introduce the construct of “Necessity of truth.” Whether or not truth is necessary depends on the extent to which it yields understanding, growth, and change. Although honesty is considered a moral virtue, my findings suggest that people may really conceptualize honesty a tactic that aids in the pursuit of other moral values. Indeed, recent research suggests that moral rules such as “Do not lie” may have evolved to protect and serve social relationships (Gray, Schein, & Ward, 2014; Gray, Young, & Waytz, 2012), but my research suggests that these rules may also serve previously overlooked relationship-independent moral values, such as enlightenment. Future research is needed to understand the moral underpinnings of enlightenment and the relationships among honesty, enlightenment, and moral judgment. 

 


Vulnerability as Strength: A Signaling Model of Trusting

Sabrina Deutsch Salamon, School of Administrative Studies, York University

Yuval Deutsch, Schulich School of Business, York University 

Summary

Research Question: How does trusting subordinates serve as a signaling vehicle for managers?  

Short Summary of conclusions: We depart from the current trust literature by adopting a signaling perspective (Spence, 1973, Zahavi, 1975) to offer a novel rationale as to why managers may choose to bestow trust upon their subordinates. We suggest that by doing so, a manager can signal credible information about his/her otherwise unobservable superior ability. Unlike the current literature, which tries to explain trusting behavior despite the exposure to risk, in our model we show that, under certain circumstances, managers choose a trusting behavior precisely because it is risky. Trusting serves as a credible signal because less able individuals cannot afford to imitate this trusting behavior as it will expose them to risks that they cannot withstand in the event that the trustee breaches the trust bestowed. Moreover, because trusting their followers earns leaders their followers trust and respect, the latter will be less likely to engage in unethical behavior. 

# 1 Implication for Practice: Managers should be aware that trusting subordinates can serve to differentiate them from less capable others. Trusting as an image enhancing move is likely to be most important when information about the manager’s ability is either scarce or incorrect. For example, when managers are new, undertake a new role, or possess an unjustified unfavourable reputation. 

# 2 Implication for Practice: Managers may find signaling their quality by trusting useful particularly in situations in which fostering employee commitment is most critical. Situations characterized by high uncertainty or situations that require a quick response represent such scenarios.   

#1 Implication for Research: A central question in the trust literature concerns how trust develops. Much of the literature has adopted a social exchange rationale, whereby subordinates perceive management trust in them as a social reward that they are likely to reciprocate. Our model provides an alternative explanation in showing that trust develops as a result of the credible information conveyed by managerial trust about the quality of the managers. Specifically, we demonstrate that the credible information regarding the manager’s ability, which is conveyed by trusting, fosters the subordinate’s trust, thus kick-starting the trust cycle. 

#2 Implication for Research: By adopting a signaling lens, we derive novel propositions on factors that influence the likelihood and intensity of managerial trusting, some of which depart from those in the trust literature. For example, in current models the trustor’s exposure to risk is central in the decision to engage in trusting behavior. Our model, however, demonstrates that the   trustor’s exposure to risk is irrelevant. Instead, it is the exposure to risk of the less qualified manager that determines the extent of trusting.