The economics of criminal and terrorist behaviour

Economic scholars have analyzed the economics of criminal behaviour and the economics of terrorist behaviour. Economic theory is based on the assumption that criminals and terrorists (even suicidal bombers) behave like “rational” economic agents, which implies that they face a well defined set of preferences, and will select their preferred choice of action to maximize their utility within a given resource restraint (Enders and Sandler, 2006) . 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 terrorist and criminal behaviour relates to:

1. The economic effects of urban planning
2. The economic impacts of security threats (crime & terrorism)
3. The economic impacts of security measures