DP3782 Property Crime with Private Protection: A Market-for-Offenses Approach
|Author(s):||Louis Hotte, Fabrice Valognes, Tanguy van Ypersele|
|Publication Date:||February 2003|
|Keyword(s):||crime, economic development, inequality, private protection, public enforcement, redistibution|
|JEL(s):||D63, D74, K42, O17|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3782|
We propose a market-for-offenses model of property crime, which explicitly accounts for protection expenditures among heterogeneous individuals. The crime equilibrium is modeled as a free-access equilibrium in which the match between criminals and victims equates the average returns to crime. We borrow from the literature on the economics of conflicts in order to define an appropriation function that combines the efforts of criminals with the protection efforts of the victims. The supply and demand for crime are endogenized taking into account incentives to participate in criminal activities and individual protection decisions. The effects of changes in public enforcement, redistribution policies and economic development are analyzed, as well as the distribution of the burden of crime among heterogeneous individuals.