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Beyond the Transaction: Every Transaction Has a Story

Reducing Crime by Removing Cash from the Streets Through EBT

Richard Wright is Curators’ Professor of Criminology and Criminal Justice at the University of Missouri-St.Louis

Recently, our research team – made up of criminologists and economists – released a study that we believe helps to explain the great American crime drop, which began in the 1990s and has continued to this day. Years of interviewing and observing active street criminals in St. Louis and Atlanta convinced us that most of them committed crimes to get cash to bankroll illicit drug use. The neighborhood drug dealer does not accept debit or credit cards. On the streets cash is king. Our prediction was that as cash waned as a transactional medium so too would predatory street crimes.

Welfare and food assistance programs traditionally were a significant source of circulating cash in high crime neighborhoods. Initially, these programs distributed money to recipients using paper checks. Because most beneficiaries are unbanked or under-banked, many were forced to cash their checks at neighborhood check- cashing establishments and keep the money with them. Offenders sought to extract this cash from them either through burglary, theft, or robbery or by selling stolen goods in the underground economy.

In the mid-90s the federal government mandated that states adopt an Electronic Benefits Transfer (EBT) system to distribute welfare benefits. Paper checks were eliminated as states gradually rolled out a system by which beneficiaries received their benefits on debit cards. In Missouri, the EBT program was implemented on a county- by-county basis. We were able to take advantage of this variation to determine how removing cash via EBT affected crime rates.

The results are striking. Controlling for dozens of other potential explanatory factors (including things like time of year, population size, existing crime fighting interventions, etc.) the overall crime rate was reduced by 9.8%.


That is a remarkable decline, especially because the conversion to EBT by no means removed all cash from the streets. To this day, for example, recipients still can cash a portion of their benefits daily through ATMs.

What are the implications of this research for the future of crime? Cash continues to decline as a transactional medium not just in the United States, but also throughout the developed and developing world. If our results are anything to go by, predatory street crime can be expected to continue to drop too. But this does not mean an end to law-breaking. As more and more financial transactions are conducted online, we likely will see a dramatic increase in cyber crime carried out by those with the necessary expertise to exploit these newly emerging criminal opportunities.

This post was co-authored by Richard Wright, University of Missouri-St. Louis, Erdal Tekin, Georgia State University and the National Bureau of Economic Research, and Volkan Topalli, Georgia State University.