By W. Bentley Macleod and Roman Rivera

Abstract: Theories of crime in economics focus on the roles of deterrence and incapacitation in reducing criminal activity. In addition to deterrence, a growing body of empirical evidence has shown that both income support and employment subsidies can play a role in crime reduction. This paper extends the Becker-Ehrlich model to a standard labor supply model that includes the notion of a consumption need (Barzel and McDonald (1973)) highlights the role of substitution vs income effects when an individual chooses to engage in crime. Second, we show that whether the production of criminal activity is a substitute or a complement with the production of legitimate activity is central to the design of optimal policy. We find that both individual responsiveness to deterrence and optimal policy vary considerably with context, which is consistent with the large variation in the effect of deterrence on crime. Hence, optimal policy is a combination of deterrence, work subsidies and direct income transfers to the individual that vary with both income and location.

Cambridge, MA: National Bureau of Economic Research, 2024. 48p.

Edited by Simon Holdaway and Paul Rock

First published in 1998. Thinking about criminology draws together the expertise of respected criminologists from the principle contemporary schools of thought. The book aims to provide a clear analysis of the relationship between sociological theory and contemporary empirical criminological research, discussing the ways in which theoretical perspectives have contributed to the understanding of relevant criminal justice institutions, law and policy

London: Routledge, 1998. 220p.

By Osborne Jackson and Thu Tran

The “hidden tax” resulting from larceny crime refers to the higher prices paid by consumers to producers who raise prices in order to pass on some of the associated cost of such theft. In the same vein, consumers who are victimized by larceny theft could pass along some of the associated cost that they bear by spending less. This study analyzes larceny crime as a hidden tax in order to examine its welfare implications. Using traditional tax theory, the authors first characterize how larceny crime might create distortions in a given product market. Employing a sample covering 17 US states during the 2000–2015 period, they then use the enactment of higher felony larceny thresholds to generate exogenous variation in larceny crime by product market. A felony larceny threshold is the dollar value of stolen property at or above which a larceny offense may be charged in court as a felony rather than a misdemeanor. Focusing on the subset of larceny crime that is likely most affected by raising the larceny threshold, the authors calculate baseline hidden tax rates and then examine how changes in larceny rates related to higher thresholds affect this tax. They use these estimated changes in the hidden tax rates to compare the associated welfare costs of larceny crime across product markets.''

Boston: Federal Reserve Bank of Boston, Research Department. 2020, 33