NCJ Number
147434
Journal
International Review of Law and Economics Issue: 13 Dated: (1993) Pages: 179-191
Date Published
1993
Length
13 pages
Annotation
This paper describes criminal behavior in the same way as conventional economic behavior, relating criminal behavior to observable economic variables and using propositions of microeconomic theory to predict the effects of various exogenous variables on illegal activity.
Abstract
The purpose of this paper is to provide a formulation of the determinants of legal and illegal activity in which individuals are classified into criminals and noncriminals, and which takes account of income transfers, taxes from legal activity, the rate of return from the legal activity, the probability of detection, and the severity of punishment as potential determinants of the extent of criminal activity. Cars are heavily taxed in Finland and these high taxes lower the real wages from legal activity. This provides a justification for the empirical part of the study, where the model is evaluated using annual Finnish data on auto thefts over the period 1958-1990. The study includes the theoretical framework with comparative statics, and empirical results. Figures, tables, notes, references