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Economics of crime

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Economics of Crime[edit]

Economics of crime is a model of economics that addresses the  impact of incentives on criminal behaviour, it also looks into possible way to lower crime. This model is often used to describe the cause of crime and also looks into the forever changing interactions between criminals and anti-crime measures; furthermore it also helps predicts and explain behaviour that is criminal in nature. The model was introduced by Gary Becker in 1968. Economist study crime, the criminal, system and crime prevention.[1]

The model:

The model looks at Crime as an economic activity. The definition of crime covers all violations including felonies like murder, robbery, assault, tax evasion and traffic and other violations[2].  The model was published in the Journal ‘Crime and Punishment: an Economic Approach”. This is regarded as the first rigorous analysis done by an economist in this way. The rational Choice framework is used to explain the motivation behind any crime. An individual looks at the gains that are expected and the losses that are expected if a crime is committed and if the gains outweigh the losses then the crime will take place; if not then the crime is not committed. This is also shown in an equation form below:

(1-p)us + puf > u̲[3]

Where:

us Stands for Expected Utility if the crime is committed successfully

uf Stands for Expected Utility when crime is committed and the individual receives punishment

p Stands for the probability of the punishment

u̲ Stands for the level of utility when the crime is not committed.

An individual will only commit crime when the net expected gains from the crime, i.e. the left side is greater than the gains from not committing the crime, i.e. the right side of the equation.[3]

According to the model a criminal is a criminal as it is the most attractive alternative present.


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  1. Machin, Stephen; Marie, Olivier (2014-01-30). "Lessons from the economics of crime". VoxEU.org. Retrieved 2020-09-18.
  2. Becker, Gary S. (1968). "Crime and Punishment: An Economic Approach". Journal of Political Economy. 76 (2): 169–217. ISSN 0022-3808.
  3. 3.0 3.1 FutureLearn. "Rational Choice Model of Crime - Economics of Crime". FutureLearn. Retrieved 2020-09-18.