Abstract
The number of reported property thefts has dropped steeply in many European countries over the last 15 years. One reason for this could be that people have become more honest, which would imply that fewer resources should be allocated to the police and to crime prevention measures. In this paper, we have elaborated upon some alternative explanatory factors behind the decrease in the number of reported crimes within a utility-maximizing model where both thefts and victims are behaving rationally. Increased time and travelling costs for reporting, economic growth and a lower rate of solving crime could all explain the development in the reported crime rate. Within this theoretical approach, the nominal crime rate could decrease, while the real crime rate either remains constant or even increases. Applying the number of reported thefts as the sole or main parameter for allocating resources for crime prevention measures may result in a sub-optimal resource allocation. Developments in the number of reported thefts must therefore be supplemented by other indicators to provide a better basis to ensure an optimal allocation of police resources to combat theft. Estimates of unreported crimes must also be included as part of the basis of these allocation decisions.
Highlights
The current year, 2018, marks 50 years since the economist Gary Becker wrote his groundbreaking article Crime and Punishment: An Economic Approach in the Journal of Political Economy Becker (1968).Until Becker published his article, the study of crime had been an area that was to a large extent reserved for psychologists and sociologists and there existed many different theories that tried to explain the level of criminal activity
We are not able to find an exhaustive amount of economic research in this area
This article is intended to contribute to the debate about how it should be, while showing that criminal records will always underestimate the real crime rate as long as the victim’s pursue a utility-maximizing behaviour
Summary
The current year, 2018, marks 50 years since the economist Gary Becker wrote his groundbreaking article Crime and Punishment: An Economic Approach in the Journal of Political Economy Becker (1968). In Sieberg’s book Criminal Dilemmas we find one of the relatively few articles that deal with problems concerning the victims of a crime The problem he deals with is this: Assume that the victim receives compensation, either from the insurance company or from local authoritities and, in addition, he gets back the value of what he lost in the robbery. The key point of the model is to show that, if the victim receives an overcompensation E, he might lie about the size of the loss—that is, the victim himself becomes a criminal—or he might use fewer of his own resources to look after his belongings The latter problem is well known by insurance companies Gaute (1998). Thereafter, we will present the results that can be deducted from the model and, the results will be discussed
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