FRANCE''S NINETEENTH CENTURY WINE CRISIS: The impact on crime rates
30 Jan 2017
The phylloxera crisis in nineteenth century France destroyed 40% of the country''s vineyards, devastating local economies. According to research by Vincent Bignon, Eve Caroli and Roberto Galbiati, the negative shock to wine production led to a substantial increase in property crime in the affected regions.
But their study, published in the February 2017 issue of the Economic Journal, also finds that there was a significant fall in violent crimes because of the reduction in alcohol consumption.
It has long been debated whether crime responds to economic conditions. In particular, do crime rates increase because of financial crises or major downsizing events in regions heavily specialised in some industries?
Casual observation and statistical evidence suggest that property crimes are more frequent during economic crises. For example, the United Nations Office on Drugs and Crime has claimed that in a sample of 15 countries, theft has sharply increased during the last economic crisis.
These issues are important because crime is also known to have a damaging impact on economic growth by discouraging business and talented workers from settling in regions with high rates of crime. If an economic downturn triggers an increase in the crime rate, it could have long-lasting effects by discouraging recovery.
But since multiple factors can simultaneously affect economic conditions and the propensity to commit crime, identifying a causal effect of economic conditions on crime rates is challenging.
The new research addresses the issue by examining how crime rates were affected by a major economic crisis that massively hit wine production, France''s most iconic industry, in the nineteenth century.
The crisis was triggered by the near microscopic insect named phylloxera vastatrix. It originally lived in North America and did not reach Europe in the era of sailing ships since the transatlantic journey took so long that it had died on arrival.
Steam power provided the greater speed needed for phylloxera to survive the trip and it arrived in France in 1863 on imported US vines. Innocuous in its original ecology, phylloxera proved very destructive for French vineyards by sucking the sap of the vines. Between 1863 and 1890, it destroyed about 40% of them, thus causing a significant loss of GDP.
Because phylloxera took time to spread, not all districts started being hit at the same moment, and because districts differed widely in their ability to grow wines, not all districts were hit equally. The phylloxera crisis is therefore an ideal natural experiment to identify the impact of an economic crisis on crime because it generated exogenous variation in economic activity in 75 French districts.
To show the effect quantitatively, the researchers have collected local administrative data on the evolution of property and violent crime rates, as well as minor offences. They use these data to study whether crime increased significantly after the arrival of phylloxera and the ensuing destruction of the vineyards that it entailed.
The results suggest that the phylloxera crisis caused a substantial increase in property crime rates and a significant decrease in violent crimes. The effect on property crime was driven by the negative income shock induced by the crisis. People coped with the negative income shock by engaging in property crimes. At the same time, the reduction in alcohol consumption induced by the phylloxera crisis had a positive effect on the reduction of violent crimes.
From a policy point of view, these results suggest that crises and downsizing events can have long lasting effects. By showing that the near-disappearance of an industry (in this case only a temporary phenomenon) can trigger long-run negative consequences on local districts through an increasing crime rate, this study underlines that this issue must be high on the policy agenda at times of crises.
''Stealing to Survive? Crime and Income Shocks in Nineteenth Century France'' by Vincent Bignon, Eve Caroli and Roberto Galbiati is published in the February 2017 issue of the Economic Journal. Vincent Bignon is at the Banque de France. Eve Caroli is at PSL-Université Paris Dauphine and at the Paris School of Economics. Roberto Galbiati is at CNRS and Sciences Po.