The economics of crime - Revision history

Albert at 16:07, 10 October 2016

2016-10-10T16:07:41Z

John P at 13:38, 28 October 2013

2013-10-28T13:38:36Z

John P: /* Limits to the rational choice theory */

2013-10-28T13:26:09Z

Limits to the rational choice theory

John P: /* Limits to the rational choice theory */

2013-10-28T13:24:19Z

Limits to the rational choice theory

John P: /* Limits to the rational choice theory */

2013-10-28T13:22:38Z

Limits to the rational choice theory

John P at 13:21, 28 October 2013

2013-10-28T13:21:42Z

John P: /* Limits to the rational choice theory */

2013-05-24T09:49:29Z

Limits to the rational choice theory

John P: /* Limits to the rational choice theory */

2013-05-24T09:48:54Z

Limits to the rational choice theory

John P: /* Limits to the rational choice theory */

2013-05-24T09:46:52Z

Limits to the rational choice theory

John P: /* Limits to the rational choice theory */

2013-05-24T09:36:35Z

Limits to the rational choice theory

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 == Socio-economic causes of crime ==
 Since the 1970s, economists contributed in explaining and validating the traditional socio-economic determinants of crime such as unemployment, education, inequality, social networks, age and socio-economic background. Based on Buonanno's (2003)<ref name="ftn61"> Buananno, P. (2003): The Socioeconomic Determinants of Crime. A Review of the Literature. Working Paper Series, No.63. University of Milan.</ref> review of the economic contributions, it can be concluded that crime is closely related to:
-[[File:Riots 3.jpg|thumb|Riots 3]]
+[[File:Riots 3.jpg|thumb|Riots often are accompanied with vandalism, such as arson]]
 * poverty,
 * social exclusion,

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 The standard economic model of crime is introduced in 1968 by Nobel Prize laureate Gary Becker<ref name="ftn55"> Becker, G. (1968): Crime and Punishment: An Economic Approach. Journal of Political Economy. No. 76, p. 169-217.</ref>. His work radically changed the way of thinking about criminal behaviour by demonstrating that not so much mental illness and social oppressions, but individual rationality, determines whether a person engages in criminal activities or not. Becker's rational criminal decides whether or not to commit crimes based on a cost-benefit analysis aimed at maximizing utility<ref>Utility is a representation of preferences over some set of goods and services(Source: Wikipedia).</ref>.
-Based on the assumption that the individual preferences are constant, rational choice theory<ref>Rational choice theory is a framework for understanding and often formally modelling social and economic behaviour. It is at the heart of modern economic theory and in the disciplines contiguous to economics, such as some parts of political science, decision theory, law and history that have adopted the theory as their model of decision making (Source: Ulen, T. S. (1999). ''Rational Choice Theory in Law and Economics''). Rational Choice Theory can be considered as an attempt to explain all (conforming and deviant) social phenomenon in terms of how self-interest individuals make choices under the influence of their preferences (Source: Business Dictionary.com).</ref> can be used to predict how changes in the probability and severity of sanctions and in various socio-economic factors may effect the amount of crime (Eide, 1999)<ref name="ftn56"> Source: Eide, E. (1999): Economic of Criminal Behavior.</ref>. The types of gains depend on the type of crime and the individual criminal: some are monetary gains, others are physical. Examples of cost are material cost, psychic cost (guilt, anxiety, fear), expected punishment cost and [[Opportunity cost|opportunity cost]].<ref name="ftn56"></ref>
+Based on the assumption that the individual preferences are constant, rational choice theory<ref>Rational choice theory is a framework for understanding and often formally modelling social and economic behaviour. It is at the heart of modern economic theory and in the disciplines contiguous to economics, such as some parts of political science, decision theory, law and history that have adopted the theory as their model of decision making (Source: Ulen, T. S. (1999). ''Rational Choice Theory in Law and Economics''). Rational Choice Theory can be considered as an attempt to explain all (conforming and deviant) social phenomenon in terms of how self-interest individuals make choices under the influence of their preferences (Source: Business Dictionary.com).</ref> can be used to predict how changes in the probability and severity of sanctions and in various socio-economic factors may effect the amount of crime<ref name="ftn56"> Source: Eide, E. (1999): Economic of Criminal Behavior.</ref>. The types of gains depend on the type of crime and the individual criminal: some are monetary gains, others are physical. Examples of cost are material cost, psychic cost (guilt, anxiety, fear), expected punishment cost and [[Opportunity cost|opportunity cost]].<ref name="ftn56"></ref>
 ===Limits to the rational choice theory===
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 * other economic and social factors.
-Although the relationship between crime and unemployment is not unambiguous and unclear<ref name="ftn61"></ref>, a study by Lochner and Moretti (2001)<ref name="ftn63"> Lochner, L. and E. Moretti (2001): The effect of education on crime: evidence from prison inmates, arrests, and self-reports. NBER Working Paper no. 8605. In: Buananno, P. (2003): The Socioeconomic Determinantes of Crime. A Review of the Literature. Working Paper Series, No.63. University of Milan, p. 20-21.</ref> argues that the impact of education on crime is so strong, that, in fact, 1 percent increase in high school completion rate of all men ages 20-60 would save the United States as much as USD 1.4 billion per year in reduced cost from crime incurred by victims and society at large (p.31). Glaeser and Sacerdote (1999)<ref name="ftn64"> Glaeser, E.L. and B. Sacerdote (1999): Why is there more crime in cities?. Journal of Political Economy, No 111, pp. 507-548. In: Ibid.</ref>, find that crime rates in big cities in the US are much higher than in small cities or rural areas due to the fact that families are much less intact in cities (45 percent), there are higher benefit levels in cities (26 percent) and lower probability of arrest (12 percent). With Hall (2007)<ref name="ftn65"> Hall, A. (2007): Socio-Economic Theories of Crime. Capella University.</ref>, however, it has to be noted, that the economic crime models focus more on property crimes such as theft, and not on crimes like murder and rape.
+Although the relationship between crime and unemployment is not unambiguous and unclear<ref name="ftn61"></ref>, a study by the economists Lochner and Moretti (2001)<ref name="ftn63"> Lochner, L. and E. Moretti (2001): The effect of education on crime: evidence from prison inmates, arrests, and self-reports. NBER Working Paper no. 8605. In: Buananno, P. (2003): The Socioeconomic Determinantes of Crime. A Review of the Literature. Working Paper Series, No.63. University of Milan, p. 20-21.</ref> argues that the impact of education on crime is so strong, that, in fact, 1 percent increase in high school completion rate of all men ages 20-60 would save the United States as much as USD 1.4 billion per year in reduced cost from crime incurred by victims and society at large (p.31). The economists Glaeser and Sacerdote (1999)<ref name="ftn64"> Glaeser, E.L. and B. Sacerdote (1999): Why is there more crime in cities?. Journal of Political Economy, No 111, pp. 507-548. In: Ibid.</ref>, find that crime rates in big cities in the US are much higher than in small cities or rural areas due to the fact that families are much less intact in cities (45 percent), there are higher benefit levels in cities (26 percent) and lower probability of arrest (12 percent). It has to be noted, however, that the economic crime models focus more on property crimes such as theft, and not on crimes like murder and rape<ref name="ftn65"> Hall, A. (2007): Socio-Economic Theories of Crime. Capella University.</ref>.
 == Interaction of anti-crime measures and criminal behaviour ==
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 === Crime displacement ===
-'''Crime displacement''' is the relocation of crime from one place, time, target, offence, or tactic to another as a result of some crime prevention initiative (Guerette, 2009)<ref name="ftn66"> Source: Guerette, R.T. (2009): Analyzing Crime Displacement and Diffusion. Tool Guide No. 10.</ref>. At worst, crime displacement can lead to more harmful consequences, for example, when there is a shift to more serious offences or to similar offences that have more serious consequences. However, according to Guerette, displacement can in some cases still provide some benefit. Crime, for example, can become less serious (e.g. petty thefts in stead of robbery), lower in volume and less impactful on the community due to a
+'''Crime displacement''' is the relocation of crime from one place, time, target, offence, or tactic to another as a result of some crime prevention initiative (Guerette, 2009)<ref name="ftn66"> Source: Guerette, R.T. (2009): Analyzing Crime Displacement and Diffusion. Tool Guide No. 10.</ref>. At worst, crime displacement can lead to more harmful consequences, for example, when there is a shift to more serious offences or to similar offences that have more serious consequences. However, according to the American criminologist Guerette, displacement can in some cases still provide some benefit. Crime, for example, can become less serious (e.g. petty thefts in stead of robbery), lower in volume and less impactful on the community due to a
 #redistribution of the concentration of crime,
 #the relocation of the crime or a
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 === Policy implications ===
-Guerette (2009) points out that crime displacement and diffusion of benefits have many implications for policing projects, and that any policing project should be well-researched in order to identify the likelihood of displacement and diffusion<ref name="ftn69"> See for more information: [http://www.popcenter.org/ http://www.popcenter.org/]</ref>.
+The American criminologist Guerette (2009) points out that crime displacement and diffusion of benefits have many implications for policing projects, and that any policing project should be well-researched in order to identify the likelihood of displacement and diffusion<ref name="ftn69"> See for more information: [http://www.popcenter.org/ http://www.popcenter.org/]</ref>.
 ==Related subjects==

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 ===Limits to the rational choice theory===
-Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref name=Wright>Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005.</ref>. Criticisers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999): Rational Choice Theory in Law and Economics (p. 800);  Winden, F., and E. Ash (2012): On The Behavioral Economics of Crime. Review of Law & Economics 8, 181-210, Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005 quote Lofland (1969) stating that actual decision are never made in a vacuum, but "are embedded in, shaped by, an individual's socio-cultural matrix of evaluation". They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>.
+Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref name=Wright>Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005.</ref>. Criticisers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999): Rational Choice Theory in Law and Economics (p. 800);  Winden, F., and E. Ash (2012): On The Behavioral Economics of Crime. Review of Law & Economics 8, 181-210; Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication</ref>.  They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>.
 As a result of the above mentioned debate, more recent economic approaches are based on the behavioural approach, which proposes a decision model comprising cognitive and emotional decision systems. According to this approach, a criminal is not irrational but rather ˜ecologically rational, outfitted with evolutionary conserved decision modules adapted for survival in the human ancestral environment (Winden and Ash, 2009)<ref name="ftn60"> Source: Winden, F. van de, E. Ash (2009): On the Behavioral Economics of Crime. Center for Research in Experimental Economics and political Decision-making (CREED). University of Amsterdam.</ref>.

@@ Line 10: / Line 10: @@
 ===Limits to the rational choice theory===
-Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref name=Wright>Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005.</ref>. Criticisers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999): Rational Choice Theory in Law and Economics (p. 800);  Winden, F., and E. Ash (2012): On The Behavioral Economics of Crime. Review of Law & Economics 8, 181-213</ref>. Wright et al. (2005)<ref name=Wright</ref> quote Lofland (1969) stating that actual decision are never made in a vacuum, but "are embedded in, shaped by, an individual's socio-cultural matrix of evaluation". They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>.
+Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref name=Wright>Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005.</ref>. Criticisers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999): Rational Choice Theory in Law and Economics (p. 800);  Winden, F., and E. Ash (2012): On The Behavioral Economics of Crime. Review of Law & Economics 8, 181-210, Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005 quote Lofland (1969) stating that actual decision are never made in a vacuum, but "are embedded in, shaped by, an individual's socio-cultural matrix of evaluation". They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>.
 As a result of the above mentioned debate, more recent economic approaches are based on the behavioural approach, which proposes a decision model comprising cognitive and emotional decision systems. According to this approach, a criminal is not irrational but rather ˜ecologically rational, outfitted with evolutionary conserved decision modules adapted for survival in the human ancestral environment (Winden and Ash, 2009)<ref name="ftn60"> Source: Winden, F. van de, E. Ash (2009): On the Behavioral Economics of Crime. Center for Research in Experimental Economics and political Decision-making (CREED). University of Amsterdam.</ref>.

@@ Line 10: / Line 10: @@
 ===Limits to the rational choice theory===
-Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref name=Wright>Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005.</ref>. Criticizers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999): Rational Choice Theory in Law and Economics (p. 800);  Winden, F., and E. Ash (2012): On The Behavioral Economics of Crime. Review of Law & Economics 8, 181-213</ref>. Wright et al. (2005)<ref name=Wright</ref> quote Lofland (1969) stating that actual decision are never made in a vacuum, but "are embedded in, shaped by, an individual's socio-cultural matrix of evaluation". They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>.
+Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref name=Wright>Wright et al. (2005): The Foreground Dynamics of Street Robbery in Britain. Advance Access Publication, 14 June 2005.</ref>. Criticisers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999): Rational Choice Theory in Law and Economics (p. 800);  Winden, F., and E. Ash (2012): On The Behavioral Economics of Crime. Review of Law & Economics 8, 181-213</ref>. Wright et al. (2005)<ref name=Wright</ref> quote Lofland (1969) stating that actual decision are never made in a vacuum, but "are embedded in, shaped by, an individual's socio-cultural matrix of evaluation". They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>.
 As a result of the above mentioned debate, more recent economic approaches are based on the behavioural approach, which proposes a decision model comprising cognitive and emotional decision systems. According to this approach, a criminal is not irrational but rather ˜ecologically rational, outfitted with evolutionary conserved decision modules adapted for survival in the human ancestral environment (Winden and Ash, 2009)<ref name="ftn60"> Source: Winden, F. van de, E. Ash (2009): On the Behavioral Economics of Crime. Center for Research in Experimental Economics and political Decision-making (CREED). University of Amsterdam.</ref>.

@@ Line 10: / Line 10: @@
 ===Limits to the rational choice theory===
-Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref>Wright et al. (2005). ''The Foreground Dynamics of Street Robbery in Britain''. Advance Access Publication, 14 June 2005.</ref>. Criticizers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999). ''Rational Choice Theory in Law and Economics'' (p. 800);  Winden, F., and E. Ash (2012). ''On The Behavioral Economics of Crime'' Review of Law & Economics 8, 181-213</ref>. Wright et al. (2005)<ref>Wright et al. (2005). ''The Foreground Dynamics of Street Robbery in Britain''. Advance Access Publication, 14 June 2005.</ref> quote Lofland (1969) stating that actual decision are never made in a vacuum, but "are embedded in, shaped by, an individual's socio-cultural matrix of evaluation". They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>
+Within the scientific world, there is an ongoing debate if the economic model of crime is in conflict with other theories of crime and fully explain criminal decision-making. This debate was initially centred around the question how rational a criminal really is, referring to the fact that the 'rationality' criminals possess is actually 'bounded' or 'limited'<ref>Wright et al. (2005). ''The Foreground Dynamics of Street Robbery in Britain''. Advance Access Publication, 14 June 2005.</ref>. Criticizers of rational choice theory wonder if potential offenders indeed have sufficient information to calculate the outcomes of their acting, and others stress out that the motivation, identity and surroundings of a criminal are also important factors that explain criminal behaviour<ref name="ftn59"> See, e.g. Ulen, T.S. (1999). ''Rational Choice Theory in Law and Economics'' (p. 800);  Winden, F., and E. Ash (2012). ''On The Behavioral Economics of Crime'' Review of Law & Economics 8, 181-213</ref>. Wright et al. (2005)<ref>Wright et al. (2005). ''The Foreground Dynamics of Street Robbery in Britain''. Advance Access Publication, 14 June 2005.</ref> quote Lofland (1969) stating that actual decision are never made in a vacuum, but "are embedded in, shaped by, an individual's socio-cultural matrix of evaluation". They underpin this with the example of an individual who lives a certain 'hedonistic' life style (e.g. a member of an urban street gang or a drug addict), and hence will unlikely consider a legitimate job since such a person does not only needs 'fast cash', but also has a reputation to uphold<ref>"In part, this helps to explain why street robberies often appear so irrational in the sense that they net little cash relative to the lengthy prison sentences that can follow." Source: Wright et al. (2005), p.13</ref>.
 As a result of the above mentioned debate, more recent economic approaches are based on the behavioural approach, which proposes a decision model comprising cognitive and emotional decision systems. According to this approach, a criminal is not irrational but rather ˜ecologically rational, outfitted with evolutionary conserved decision modules adapted for survival in the human ancestral environment (Winden and Ash, 2009)<ref name="ftn60"> Source: Winden, F. van de, E. Ash (2009). ''On the Behavioral Economics of Crime''. Center for Research in Experimental Economics and political Decision-making (CREED). University of Amsterdam.</ref>.