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Lecture Issues in economics today - Chapter 24

Learning objectives of this chapter include: The elasticity of demand, the determinants of elasticity, elasticity and total revenue, the elasticity of supply, tax incidence. | Chapter 24 The Economics of Crime Chapter Outline WHO COMMITS CRIME AND WHY THE RATIONAL CRIMINAL MODEL THE COSTS OF CRIME OPTIMAL SPENDING ON CRIME CONTROL Who Commits Crime and Why Disproportionately to their percentage in the population crime is committed by Men The young The poor The socially disadvantaged Sources of Crime Statistics Police reports Potentially subject to police biases against minorities. Victim accounts Not subject to bias because it is in the interest of a victim to give an accurate description of the perpetrator. The Result Whether we look at crime rates from police reports or from victim accounts the result is the same: minorities commit more crime than would be accounted for by their 24% of the population. The Rational Criminal Model Becker’s rational criminal model (RCM) assumes that a criminal’s choice to commit a crime is a rational one comparing the benefits of the crime with the uncertain outcome of success or jail. The model looks at crime like an . | Chapter 24 The Economics of Crime Chapter Outline WHO COMMITS CRIME AND WHY THE RATIONAL CRIMINAL MODEL THE COSTS OF CRIME OPTIMAL SPENDING ON CRIME CONTROL Who Commits Crime and Why Disproportionately to their percentage in the population crime is committed by Men The young The poor The socially disadvantaged Sources of Crime Statistics Police reports Potentially subject to police biases against minorities. Victim accounts Not subject to bias because it is in the interest of a victim to give an accurate description of the perpetrator. The Result Whether we look at crime rates from police reports or from victim accounts the result is the same: minorities commit more crime than would be accounted for by their 24% of the population. The Rational Criminal Model Becker’s rational criminal model (RCM) assumes that a criminal’s choice to commit a crime is a rational one comparing the benefits of the crime with the uncertain outcome of success or jail. The model looks at crime like an investment: take a risk, get a high expected return; play it safe, get a low expected return. Implications of the RCM People with high legally-derived income are less likely to commit crime. The greater the punishment the less likely the criminal is to commit crime. The more likely the criminal is to be caught the less likely they are to commit crime. Evidence in favor of the RCM Less than half of the prison population has a high school degree. 33% of criminals were not working when they committed their crime. Crime rose during the 1980s as real income for the poor was stagnant or falling and fell during the 1990s when it was rising. Crime rose during the 1960s when real income for the poor was rising. Crime was much lower during the 1930s when incomes were quite low because of the depression. Evidence against the RCM Challenges to the Basic Assumptions of the RCM While property and drug crimes can be seen through the expected “cost-benefit” lens, others can not: e.g. rape, spousal abuse, .