Journal of Health Economics 68 (2019) 102230 Contents lists available at ScienceDirect Journal of Health Economics journal homepage: www.elsevier.com/locate/econbase More sneezing, less crime? Health shocks and the market for offenses Aaron Chalfin a , Shooshan Danagoulian b , Monica Deza c,∗ a University of Pennsylvania, United States b Wayne State University, United States c CUNY – Hunter College, United States a r t i c l e i n f o Article history: Received 11 September 2018 Received in revised form 18 May 2019 Accepted 27 August 2019 Available online 17 September 2019 Keywords: Allergies Pollen Health shocks Crime Residential crime a b s t r a c t A large literature points out that exposure to criminal victimization has far-reaching effects on public health. What remains surprisingly unexplored is that role that health shocks play in explaining aggregate fluctuations in offending. This research finds novel evidence that crime is sensitive to health shocks. We consider the responsiveness of crime to a pervasive and common health shock which we argue shifts costs and benefits for offenders and victims: seasonal allergies. Leveraging daily variation in city- specific pollen counts, we present evidence that violent crime declines in U.S. cities on days in which the local pollen count is unusually high and that these effects are driven by residential violence. While past literature suggests that property crimes have more instrumental motives, require planning, and hence are particularly sensitive to permanent changes in the cost and benefits of crime, we find that violence may be especially sensitive to health shocks. © 2019 Elsevier B.V. All rights reserved. 1. Introduction The neoclassical economic model of crime laid out in Becker’s seminal contribution to the applied microeconomics literature envisions crime as a gamble undertaken by a rational individual who is weighing the costs and benefits of offending at the margin. 1 The cost and, therefore, the supply of offending is understood to be a function of the certainty and severity of criminal sanctions. On the demand side of the market, a victim’s “demand” for crime is a function of the marginal costs and benefits of investments in pre- caution – a category that includes capital investments (e.g., locks or surveillance cameras) as well as changes in routine activities that raise offender search costs (Ehrlich, 1996). A large literature examines the sensitivity of crime to policy inputs that potentially shift costs and benefits and can be readily manipulated by a social planner. 2 While policy regimes sometimes ∗ Corresponding author. E-mail address: monica.deza@hunter.cuny.edu (M. Deza). 1 Discussions of the costs and benefits of offending can be found in early trea- tises on the subject by Beccaria (1764) and Bentham (1789) and later extensions by Ehrlich (1973); Shavell (1991) and McCrary (2010) among others. 2 See Chalfin and McCrary (2017) for a review of the deterrence literature in eco- nomics. Among the many examples of the studies that focus on changes manipulated by a social planner are literatures that consider the effect of increases in police resources (DiTella and Schargrodsky, 2004; Helland and Tabarrok, 2004; Evans and Owens, 2007; Weisburd et al., 2016; Chalfin and McCrary, 2017), gun control laws (Bronars and Lott, 1998; Duggan, 2001; Donohue et al., 2017) capital punishment shift in response to legislation or new technology, they are typically constant, evolving slowly over time or shifting only occasionally. In most cases, an offender (victim) who goes to sleep in the evening faces the same policy regime and thus the same costs and benefits of offending (precaution) when he wakes up the next morning. In this sense, the costs of offending that are shifted by a social planner – or a technological shock – are essentially permanent or long-run costs. In this paper, we point out that participants in the market for offenses face transitory shocks as well and that these are in constant flux. Given that market participants may be myopic or, at least, only boundedly rational, shifts in situational factors may be particularly relevant in the market for offenses, especially for vio- lent offenses that often do not require planning and which need not have instrumental motives. Yet, despite the fact that violent crimes drive an outsize share of the social costs, the literature is mostly silent on the extent to which shocks to situational factors shocks explain variation in violent crime. regimes (Ehrlich, 1973, 1977; Katz et al., 2003; Mocan and Gittings, 2003; Donohue and Wolfers, 2006) and harsher sanctions (Helland and Tabbarok, 2007; Drago and Galbiati, 2012; Lee and McCrary, 2017). Recent research also examines the effect of policy interventions that address victim behavior by changing the costs and bene- fits of private precautions – for example, business improvement districts (Cook and MacDonald, 2011), insurance against terrorism risk (Lakdawalla and Zanjani, 2005) and the availability of ride sharing apps that make it easier for victims to avoid the risk of street crimes (Dills and Mulholland, 2018). https://doi.org/10.1016/j.jhealeco.2019.102230 0167-6296/© 2019 Elsevier B.V. All rights reserved.