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

Giovanni Mastrobuoni ()

Economic Journal, 2015, vol. 125, issue 586, F256-F288

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.

Date: 2015
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