The economics of criminal and terrorist behaviour

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The economics of criminal and terrorist behaviour deals with the impact of incentives on criminal and terrorist behaviour and the possible measures to reduce threats. Economic models not only predict and explain the behaviour of criminals and terrorists, but can also be used to describe the causes of crime and terrorism and the dynamic interaction between criminals/terrorists and security measures.

Relevance for the urban planner

Insight in the impact of incentives on criminal and terrorist behaviour is of major relevance for urban planners since criminals and terrorists will most likely alter their behaviour in reaction to taken security measures in order to fulfil their goals. Put differently, when certain urban objects are being successfully protected against threats, one can either expect a dispersion towards different urban objects (e.g. a supermarket as a target for robbery in stead of a bank building), or different tactics (e.g. terrorists using liquid bombs on airplanes, which are not detectable by metal detectors).

Rational economic agents

No to terrorism

Economic theory is based on the assumption that criminals and terrorists (even suicidal bombers) behave like rational economic agents[1]. A rational agent is also referred to as the Homo Economicus, which implies that they face a well defined set of preferences, and will select their preferred choice of action to maximise their utility[2] within a given resource restraint. Consequently, economic theory predicts that a change in the relative price (due to for example security measures) will result in a shift of criminal and terrorist action towards the relatively cheaper activity (legal or not legal).

The economics of criminal behaviour and terrorist behaviour

In general, the economics of terrorist behaviour is closely related to the economics of crime. Both theories assume a rational economic agent, a socio-economic background and a dynamic interaction between the criminal/terrorist and its counterpart. However, where crime is in most cases solely related to socio-economic factors such as poverty, wage and income inequality, level of education, etc., the roots of terrorism can be found in economic factors, but also political (e.g. repression) and/or social factors (e.g. religious, ethnic and geography).

Related subjects

Footnotes and references

  1. A rational economic agent is an agent with clear preferences, who models uncertainty via expected values, and "always chooses to perform the action that results in the optimal outcome for itself from among all feasible actions". Source: Wikipedia. Online:
  2. "Utility is a representation of preferences over some set of goods and services". Source: Wikipedia. Online: