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The Value of Connections: Evidence from the Italian†American Mafia

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  • Giovanni Mastrobuoni

Abstract

This study uses declassified data on US mafia members of the 1950s and 1960s to estimate the criminal network effect on their economic status. I measure economic status exploiting detailed information about their place of residence. Housing values are reconstructed using current deflated transactions data. I deal with non†random sampling of mobsters modelling investigations on connections as Markov chains. Reverse causality between economic status and the gangster's position in the network is solved exploiting exogenous exposure to pre†immigration connections. A standard deviation increase in closeness centrality increases economic status by between one†quarter and three†quarters of a standard deviation.

Suggested Citation

  • Giovanni Mastrobuoni, 2015. "The Value of Connections: Evidence from the Italian†American Mafia," Economic Journal, Royal Economic Society, vol. 125(586), pages 256-288, August.
    • Handle: RePEc:wly:econjl:v:125:y:2015:i:586:p:f256-f288
    DOI: 10.1111/ecoj.12234
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    Cited by:

    1. Lonsky, Jakub, 2020. "Gulags, Crime, and Elite Violence: Origins and Consequences of the Russian Mafia," GLO Discussion Paper Series 711, Global Labor Organization (GLO).
    2. Lindquist, Matthew J. & Zenou, Yves, 2019. "Crime and Networks: 10 Policy Lessons," IZA Discussion Papers 12534, Institute of Labor Economics (IZA).
    3. Thomas Bourveau & Renaud Coulomb & Marc Sangnier, 2021. "Political Connections and White-Collar Crime: Evidence from Insider Trading in France," Journal of the European Economic Association, European Economic Association, vol. 19(5), pages 2543-2576.
    4. Arun Advani & Bansi Malde, 2018. "Credibly Identifying Social Effects: Accounting For Network Formation And Measurement Error," Journal of Economic Surveys, Wiley Blackwell, vol. 32(4), pages 1016-1044, September.
    5. Marco Le Moglie & Giuseppe Sorrenti, 2022. "Revealing "Mafia Inc."? Financial Crisis, Organized Crime, and the Birth of New Enterprises," The Review of Economics and Statistics, MIT Press, vol. 104(1), pages 142-156, March.
    6. Lonsky, Jakub, 2020. "Gulags, crime, and elite violence : origins and consequences of the Russian mafia," BOFIT Discussion Papers 24/2020, Bank of Finland, Institute for Economies in Transition.
    7. Francesca M. Calamunci, 2022. "What happens in criminal firms after godfather management removal? Judicial administration and firms’ performance," Small Business Economics, Springer, vol. 58(1), pages 565-591, January.
    8. Campaniello, Nadia & Gray, Rowena & Mastrobuoni, Giovanni, 2016. "Returns to education in criminal organizations: Did going to college help Michael Corleone?," Economics of Education Review, Elsevier, vol. 54(C), pages 242-258.
    9. Esteves, Rui & Geisler Mesevage, Gabriel, 2019. "Social Networks in Economic History: Opportunities and Challenges," Explorations in Economic History, Elsevier, vol. 74(C).
    10. Arellano-Bover, Jaime & De Simoni, Marco & Guiso, Luigi & Macchiavello, Rocco & Marchetti, Domenico J. & Prem, Mounu, 2024. "Mafias and Firms," SocArXiv sr6ep, Center for Open Science.
    11. Paolo Pinotti, 0. "The Credibility Revolution in the Empirical Analysis of Crime," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 0, pages 1-14.
    12. repec:zbw:bofitp:2020_024 is not listed on IDEAS
    13. Federico Cingano & Marco Tonello, 2020. "Law Enforcement, Social Control and Organized Crime: Evidence from Local Government Dismissals in Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(2), pages 221-254, July.
    14. Nicola Mastrorocco, 2018. "Organised Crime, Captured Politicians and the Allocation of Public Resources," Trinity Economics Papers tep1018, Trinity College Dublin, Department of Economics.
    15. Pinotti, Paolo, 2020. "The credibility revolution in the empirical analysis of crime," CEPR Discussion Papers 14850, C.E.P.R. Discussion Papers.
    16. Ken Yahagi, 2019. "Law enforcement with criminal organizations and endogenous collaboration," European Journal of Law and Economics, Springer, vol. 48(3), pages 351-363, December.
    17. Paolo Pinotti, 2020. "The Credibility Revolution in the Empirical Analysis of Crime," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(2), pages 207-220, July.
    18. Murray, Cameron K. & Frijters, Paul, 2016. "Clean money, dirty system: Connected landowners capture beneficial land rezoning," Journal of Urban Economics, Elsevier, vol. 93(C), pages 99-114.
    19. Pietro A. Bianchi & Antonio Marra & Donato Masciandaro & Nicola Pecchiari, 2017. "Is It Worth Having the Sopranos on Board? Corporate Governance Pollution and Organized Crime: The Case of Italy," BAFFI CAREFIN Working Papers 1759, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

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