2.3 Theoretical Framework
2.6.4 Location as an instrument
In Table 2.6 I show reduced form IV estimates for the model in Equation 2.10. In the richest specifications we can see that being 10% closer to Charing Cross is associated with a 0.06 percentage point reduction in the first measure of performance and a 0.12 percentage point reduction in the second measure.
Table 2.7 reports the results from 2SLS regressions. The point estimates are actually smaller than in the OLS: in the richer specification, a 10% increase in the real wage is associated with a 0.2 percentage point fall in overturned sentences and a 0.3 percentage point fall in the amount of appeals. In all specifications the effect of the real wage on performance is negative and significant. This is evidence that judges are indeed willing to accept a negative wage premium to sort in locations offering a higher level of amenities.
2.6.5
Alternative mechanisms
This paper argues that the differences in performance of UK Crown Courts are due to the location choice of judges who are attracted by amenities in higher density areas, London in particular. There are, however, potential alternative mechanisms that would explain these findings. First of all, as already mentioned, differences in performance could be due to higher specialisation in London courts. Nonetheless, the evidence seems to point against such conclusion. Figure 2.3 shows that despite systematic differences between London courts and the others in terms of offence categories of cases received, the overall case composition is fairly balanced. Moreover, in the empirical analysis controlling for the case-mix actually strengthens the relationship between amenities and performance. A different possibility is that judges are ex-ante identical but being in London increases
their ability due to human capital externalities correlated with amenities.54 This is surely a possibility but the profile of sitting judges seems to suggest that most candidates join after having already acquired sizeable experience in the private sector. Clearly, the human capital built working as a lawyer or in other positions in the legal sector is not necessarily a substitute for that acquired on the job. There are also other factors rather than amenities that could determine the location choices of talented judges. In particular, the preference for London could be locked in by a previous career choice occurred at a younger age in presence of a fixed cost of relocation. Also, the location preference could be driven by a joint decision with the spouse as theorised by Costa and Kahn (2000).55 Career
concerns could also be a factor. While for many being a circuit judge is an end of career job (Schultz and Shaw, 2003), a few progress to higher courts.56 From one side, being
exposed to higher profile cases could increase the chances of being recommended for a position in a higher court. From the other, as the High Court and the Court of Appeal, the usual career avenues, are located in London, being in the same city could allow them to build a network that will ease career advancement. Yet the fact that courts in Bristol and Manchester as well as those in the outskirts of London are high performers seems to partially refute the latter. The above hypotheses would all require individual level data on judges to be formally tested. Finally, we can also conjecture the existence of a job amenity deriving from being in London. Even though the case composition does not vary drastically across the country, it is possible that cases in London are more interesting to try for judges.
2.7
Conclusion
In this paper I exploit the rigidity of nationally regulated wages for criminal court judges to show the existence of a negative relationship between real wages and performance. At
more urban amenities. The results hold true with two different measures of performance and several measures of urban amenities and market density. I interpret these findings as evidence that high-skilled, high-earning workers sort into large cities because they are attracted by urban amenities and consumption varieties. This differs from standard agglomeration theory predicting that the concentration of high-skilled workers in larger cities is driven by the higher wages and other forms of externalities.
A second positive implication of the paper is outlining another source of inequality between the city of London and the rest of the United Kingdom. Courts in London, indeed, perform better on average than the ones in the rest of the country. If the performance of judges differs among courts, defendants may receive a different treatment depending on the court in which they are tried. Given the role of a judge as a mediator between public interest and defendants’ rights, these findings deserve scrutiny by policymakers. A normative implication would be that wages should vary across the country depending on the attractiveness of a location.
More generally, we learn that governments willing to relocate institutions serving the public interest away from congested cities with high rental cost, should be aware of a trade-off between cost efficiency and the quality of civil servants that depends on their skill level and remuneration.57
Moreover, the findings of this paper are particularly relevant at a time when the Ministry of Justice and the Home Office are piloting virtual hearings (Home Office, 2017) to increase the efficiency of the justice process. Despite criticism that the court gravitas is a necessary component of criminal trials as well as the emotions of defendants and witnesses (The Telegraph, 2015), a future where the judiciary is centralised and all functions are performed by a single large court is not unimaginable. If that is the case, this paper suggests that the location of the court should be carefully chosen to make sure to attract the most talented candidates.
57For example, consistent with the evidence presented in this paper, the recently conducted indepen-
dent review of UK economics statistics (Bean, 2016) concluded that the 2007 relocation of the Office for National Statistics from London to Newport, South Wales, has significantly reduced the quality of its output.
2.8
Figures
Figure 2.1: Example of a circuit judge Job Advert
Figure 2.2: Crown Court performance
The performance measure is the percentage of allowed sentence appeals (overturned sentences) on the number of effective trials.
Figure 2.3: Case-mix in UK criminal courts 0.00 0.05 0.10 0.15 0.20 0.25
Violence ** Sexual *** Robbery Theft
Damage & arson *** Drug
Weapons ***Public order **
Society Fraud * Summary
England and Wales London
(a) Type of cases in London courts vs the rest of England and Wales
Blackfriars Central Criminal Court Croydon
Harrow Inner London Sessions Isleworth Kingston upon Thames Snaresbrook Southwark St Albans Wood Green Woolwich England and Wales
0 0.25 0.5 0.75 1
Violence Sexual Robbery Theft Damage & arson Drug Weapons Public order Society Fraud Summary
(b) London courts case-mix
Figure 2.3a shows the average amount of cases by offence dealt with in London courts compared to the rest of England and Wales. On the y-axis: percentage of cases received. Each offence category reports the
Figure 2.4: Amenities vs house prices
Each data point is a Crown Court. On the vertical axis: population density in a 30 km radius circle around the court, in logarithm. On the horizontal axis: the logarithm of the average house price, in a 15 km radius, in £1000 from 2010 to 2016. The London area is defined as a circle of 35 km radius around Charing Cross.
Figure 2.5: Amenities vs house prices
(a) Hospitality and leisure (b) Health, hospitality, leisure and retail Each data point is a Crown Court. On the vertical axis: measure of urban amenities equal to the first principal component of the hospitality and leisure business density (left), health, hospitality, leisure and retail business density (right). On the horizontal axis: the logarithm of the average house price, in a 15 km radius, in £1000 from 2010 to 2016. The London area is defined as a circle of 35 km radius around Charing Cross.
Figure 2.6: Performance and distance from metropolitan areas
(a) Distance from Charing Cross (b) Distance from Metro Area level 3 Each data point is a Crown Court. On the vertical axis: performance measured using the percentage of allowed sentence appeals on effective trials. On the horizontal axis: on the left the logarithm of the distance between the court and Charing Cross, on the right the logarithm of the distance between the court and the closest level 3 metropolitan area, defined according to OECD (2016).
Figure 2.7: Performance by density
Quintile of population density in a 30 km radius
Performance z-score Leisure z-score -0.5 -0.25 0 0.25 0.5 -2 -1 0 1 2 1 2 3 4 5
2.9
Tables
Table 2.1: Circuit judges’ salaries
Year Standard salary Old Bailey
2012
£128,296
£138,548
2013
£129,579
£139,933
2014
£130,875
£141,332
2015
£132,184
£142,745
2016
£133,506
£144,172
Source: Ministry of Justice (2015, 2016), Judicial Salaries. Each salary is effective from April, 1st of the relative year. The col- umn to the right reports the salary of circuit judges at the Cen- tral Criminal Court in London (the Old Bailey) who receive a higher wage, band 6.1, compared to band 5 for all the other cir- cuit judges.
Table 2.2: Judiciary performance, real wage and amenities Dependent variable: Allowed sentence appeals
(1) (2) (3) (4) (5) (6)
Panel A
Log real wage -0.0128∗∗∗ -0.0114∗ -0.0223∗∗∗ -0.0194∗∗∗
(0.0040) (0.0060) (0.0061) (0.0065)
Leisure 0.00364∗∗∗ 0.000667 0.00688∗∗ 0.00398
(0.0013) (0.0020) (0.0029) (0.0030)
Panel B
Log real wage -0.0101∗∗ -0.0218∗∗∗
(0.0046) (0.0057) Log density 30 km 0.00550∗∗ 0.00276 0.00746∗ 0.00701∗∗ (0.0024) (0.0027) (0.0039) (0.0032) Case-mix X X X Case-load X X X Observations 73 73 73 69 69 69
∗ p < 0.10,∗∗ p < 0.05,∗∗∗ p < 0.01. Robust standard errors in parentheses. OLS where the dependent
variable is equal to 1 minus the ratio between the number of allowed sentence appeals and effective trials. Log real wage is the logarithm of the court judges’ real wage. Leisure is the first principal component score of hospitality and leisure business densities in a 30 km radius circle around the Crown Court. Log density 30 km is the logarithm of population density in a 30 km radius circle around the Crown Court. Case-mix is the three first principal components for twelve measures of prevalence of a category of offence in the court. Case-load is the total number of cases received (including those that never go to trial) over the number of judges sitting in the court. Sheffield Crown Court is excluded from all regressions. Models where case-load is used as a control also exclude Great Grimsby, Newport, Salisbury and Weymouth & Dorchester.
Table 2.3: Judiciary performance, real wage and amenities, all appeals Dependent variable: All sentence appeals
(1) (2) (3) (4) (5) (6)
Panel A
Log real wage -0.0212∗∗∗ -0.0245∗∗∗ -0.0392∗∗∗ -0.0367∗∗∗
(0.0063) (0.0086) (0.0082) (0.0088)
Leisure 0.00480∗∗ -0.00158 0.00894∗∗ 0.00346
(0.0022) (0.0029) (0.0041) (0.0039)
Panel B
Log real wage -0.0214∗∗∗ -0.0387∗∗∗
(0.0067) (0.0080) Log density 30 km 0.00563 -0.000192 0.00675 0.00595 (0.0036) (0.0038) (0.0060) (0.0048) Case-mix X X X Case-load X X X Observations 73 73 73 69 69 69
∗ p < 0.10,∗∗ p < 0.05,∗∗∗ p < 0.01. Robust standard errors in parentheses. OLS where the dependent
variable is equal to 1 minus the ratio between the number of sentence appeals and effective trials. Log real wage is the logarithm of the court judges’ real wage. Leisure is the first principal component score of hospitality and leisure business densities in a 30 km radius circle around the Crown Court. Log density 30 km is the logarithm of population density in a 30 km radius circle around the Crown Court. Case-mix is the three first principal components for twelve measures of prevalence of a category of offence in the court. Case-load is the total number of cases received (including those that never go to trial) over the number of judges sitting in the court. Sheffield Crown Court is excluded from all regressions. Models where case-load is used as a control also exclude Great Grimsby, Newport, Salisbury and Weymouth & Dorchester.
Table 2.4: Placebo test
Dependent variable: Allowed conviction appeals
(1) (2) (3) (4) (5) (6)
Log real wage 0.000746 -0.00161
(0.0010) (0.0016) Leisure -0.000564∗ -0.000317 (0.00032) (0.00056) Log density 30 km -0.00107∗∗ -0.00142∗∗ (0.00048) (0.00067) Case-mix X X X Case-load X X X Observations 73 69 73 69 73 69
∗ p < 0.10,∗∗ p < 0.05,∗∗∗ p < 0.01. Robust standard errors in parentheses. OLS where the dependent
variable is equal to 1 minus the ratio between the number of allowed conviction appeals and effective trials. Log real wage is the logarithm of the court judges’ real wage. Leisure is the first principal component score of hospitality and leisure business densities in a 30 km radius circle around the Crown Court. Log density 30 km is the logarithm of population density in a 30 km radius circle around the Crown Court. Case-mix is the three first principal components for twelve measures of prevalence of a category of offence in the court. Case-load is the total number of cases received (including those that never go to trial) over the number of judges sitting in the court. Sheffield Crown Court is excluded from all regressions. Models where case-load is used as a control also exclude Great Grimsby, Newport, Salisbury and Weymouth & Dorchester.
Table 2.5: Judiciary performance and metropolitan areas Dependent variable: percentage of appeals
(1) (2) (3) (4) London 0.0131∗∗∗ 0.0212∗∗ (0.0047) (0.0096) Metro area 0.00566 0.00950 (0.0062) (0.0071) Case-mix X X Case-load X X Observations 73 69 62 58
∗ p < 0.10, ∗∗ p < 0.05, ∗∗∗ p < 0.01. Robust standard errors in
parentheses. OLS where the dependent variable is equal to 1 mi- nus the ratio between the number of allowed sentence appeals and effective trials. London is a dummy=1 if the court is located in a
Table 2.6: Reduced form IV, judiciary performance and distance from Charing Cross Dependent variable:
Allowed appeals All appeals
(1) (2) (3) (4)
Log distance from Charing Cross -0.00371∗∗ -0.00727∗∗ -0.00565∗ -0.0126∗∗∗
(0.0017) (0.0031) (0.0029) (0.0043)
Case-mix X X
Case-load X X
Observations 73 69 73 69
∗ p < 0.10,∗∗ p < 0.05,∗∗∗ p < 0.01. Robust standard errors in parentheses. OLS where the
dependent variable is equal to 1 minus the ratio between the number of allowed sentence appeals and effective trials (1-2) or equal to 1 minus the ratio between the number of sentence appeals and effective trials (3-4). Log distance from Charing Cross is the logarithm of the distance in km between the court and Charing Cross. Case-mix is the three first principal components for twelve measures of prevalence of a category of offence in the court. Case-load is the total number of cases received (including those that never go to trial) over the number of judges sitting in the court. Sheffield Crown Court is excluded from all regressions. Models where case-load is used as a control also exclude Great Grimsby, Newport, Salisbury and Weymouth & Dorchester.
Table 2.7: 2SLS Judiciary performance and real wage Dependent variable:
Allowed appeals All appeals
(1) (2) (3) (4)
Log real wage -0.0108∗∗ -0.0204∗∗∗ -0.0164∗∗ -0.0352∗∗∗
(0.0044) (0.0076) (0.0075) (0.0099)
Case-mix X X
Case-load X X
Observations 73 69 73 69
∗ p < 0.10, ∗∗ p < 0.05, ∗∗∗ p < 0.01. Robust standard errors in
parentheses. 2SLS where the dependent variable is equal to 1 minus the ratio between the number of allowed sentence appeals and effec- tive trials (1-2) or equal to 1 minus the ratio between the number of sentence appeals and effective trials (3-4). Log real wage, the endoge- nous regressor, is the logarithm of the court judges’ real wage. The excluded instrument is the logarithm of the distance in km between the court and Charing Cross. Case-mix is the three first principal components for twelve measures of prevalence of a category of offence in the court. Case-load is the total number of cases received (including those that never go to trial) over the number of judges sitting in the court. Sheffield Crown Court is excluded from all regressions. Models where case-load is used as a control also exclude Great Grimsby, New- port, Salisbury and Weymouth & Dorchester. The robust first-stage F-statistics at a 5% confidence level is 137.994 in columns 1, 3 and 54.211 in columns 2, 4.
2.A
Data
The judiciary variables were obtained from a number of sources. The information on the number of cases and trials derives from the Criminal Court quarterly statistics 2010-2016 (Ministry of Justice, 2017a). The information on appeals and the number of judges in each court is not published by the Ministry of Justice and was obtained in the response to two successive Freedom of Information requests (Ministry of Justice, 2018b,c). The information on different types of offences for individual Crown Courts is obtained from the Crown Courts receipts, disposals, and outstanding cases by offence group 2014-16 (Ministry of Justice, 2018a).
Performance: Performance measures are computed as: P erf ormancec = 1 −
Appealsc
T rialsc
Appealsc can be the number of allowed sentence appeals, the number of sentence appeals
or the number of allowed conviction appeals (in the variable used for the placebo test) against rulings from Crown Court c. T rialsc is the number of effective trials in Crown
Court c. Effective trials are trials where the jury is sworn in and a verdict is reached. I exclude Sheffield Crown Court from the sample because it is an outlier: performance measured using allowed sentence appeals is 7 standard deviations lower than the mean, performance measured using all appeals is 5.6 standard deviations lower than the mean. The results are robust to including Sheffield Crown Court in the sample.
Case-mix and case-load: I compute the case-mix starting from the percentage of received cases for each offence group compared to the total of received case per court. The categories are: violence against the person, sexual offences, robbery, theft offences, criminal damage and arson, drug offences, possession of weapons, public order offences, miscellaneous crimes against society, fraud offences, summary, and unknown. For each category I compute the average percentage for the years 2014-16. My measure of case-mix is the three first principals components of all the individual case categories’ percentage prevalence in the court. Case-load instead is the ratio between the number of cases received by a Crown Court and the number of judges sitting in said court. There is no case-load data on the following Crown Courts: Great Grimsby, Newport, Salisbury and
of the local authority. The 15 km radius of the circle is chosen approximately equal to the average commuting distance in the UK in 2015 (Le Vine, Polak, and Humphrey, 2017). Amenities: I compute different indicators of the level of amenities in the city where Crown Court c is located using the following formula:
amenitiesc= PN i αi× intersectic areaic areac
The circle around the Crown Court c is either of 30 or 50 km in radius. When the level of amenities is measured using population density, αic is the population living in output area
i and areaicthe area of the output area m2. intersecticis the intersection between the two.
See Figure 2.B4 for a graphical representation. When the level of amenities is measured using business density, αic is the number of businesses in local authority i and areaic
the area of the local authority in m2. intersect
ic is the intersection between the two. I
compute the density of the following business categories from ONS (2017): G - Wholesale and retail trade; repair of motor vehicles and motorcycles, I - Accommodation and food service activities, Q - Human health and social work activities, R - Arts, entertainment and recreation. The two amenity variables I construct are the first principal components of respectively: categories I and R in the first variable (Leisure), all four categories in the second (Amenities).
Table 2.A1: Main variables, summary statistics
Variable Mean SD Min Max N Obs
Performance (allowed) 0.940 0.020 0.888 0.980 73 Performance (all) 0.913 0.029 0.837 0.969 73 Real wage 0.630 0.288 0.218 1.351 73 Leisure (30 km) 0.008 1.421 -0.953 3.429 73 Density (30 km) 0.001 0.001 0.000 0.003 73 Amenities (30 km) 0.010 2.008 -1.460 4.870 73
2.B
Additional Figures
Figure 2.B1: Tribunals structure chart
The Court of Appeal
Upper Tier Tribunal Superior court of record (equivalent status to the High Court: it can both set precedents and enforce its decisions and those of the First Tier Tribunal without High Court intervention). Also the first (and only) tribunal to have the power of judicial review
Employment Appeals Tribunal
NOT part of the First Tier/Upper Tier Administrati ve Appeals Chamber Tax and Chancery Chamber Immigration and Asylum Chamber Lands Chamber Employment Tribunal (England and Wales)
First Tier Tribunal (seven chambers)
1. The War Pensions and Armed Forces Compensation Chamber;
2. The Social Entitlement Chamber;
3. The Health, Education and Social Care Chamber; 4. The General Regulatory Chamber;
5. The Tax Chamber;
6. The immigration and Asylum Chamber; 7. The Land, Property and Housing Chamber
Source: The structure of the Tribunals Service in The Judicial System of England and Wales. A visitor’s guide (Lady Justice Arden, 2016).
Figure 2.B2: The courts of England and Wales
UK Supreme Court
Appeal only, on points of law
Justices of the Supreme Court
Court of Appeal
Appeal only, on points of law to either the Criminal or Civil Divisions
Lord Chief Justice, Heads of Division and Court of Appeal judges