The Economic Theory of Crime - Essay Example

Economics of Law Consider how economics of law can provide helpful insights into controlling an increase in crime rates Student's Name: ______________ Tutor's Name: _________________ Course ID: ____________ Dated: May 7, 2007-05-08 Crime economics is just like "supply" and "demand" theory of marketing economics, however the little difference lies in the behaviour of victimiser who does not sell the right to be victimised. The economic theory of crime states that an offender is at greater risk when he weighs the expected cost of committing the crime along with the probability of being caught multiplied by the sanction if caught, against the expected benefit (worth robbery of any valuable). (Becker, 1968) An offender is aware of the fact that he would have to take costly actions to reduce the risk of exposure while committing or intending to commit a crime. According to Bodell & Kerton (1995) "The higher the cost of being detected, the lower is the expected profit" (Bodell & Kerton, 1995) This refers to the notion that offenders are always at risk, therefore they expect higher profit with greater rate of risk involved in committing crime. Thus they might use an accomplice to watch for police, buy more sophisticated equipment to break into cars more quickly, etc. On the other hand, some potential offenders find that the expected reward from crime is less than the expected cost. Similarly, if the opportunity which knocks at the door of offender which costs his devoted time to criminal activity, potential offenders are likely to reduce their criminal activity. The greater the opportunity, the higher would be the cost, thus we expect the supply of crime to decrease when good jobs in the legitimate sector are plentiful, and to increase when unemployment is high. In fact, several studies have confirmed this theory, by showing that crime rises and falls with the business cycle and the ups and downs of the economy. What about the "demand" side of the market Potential victims can take costly actions such as installing burglar alarms, taking cabs instead of walking in high-crime areas, purchasing defensive firearms, and taking lessons in self-defence. All of these activities might affect the potential victim's chances of being victimised. Although potential victims do not actually "demand" crime, they do demand-and devote considerable resources to trying to achieve-reductions in their chances of being victimised. This is the reason for why they "demand" less crime. However according to Kopcke et al (2004) "Workers react this way even if demand declines temporarily" (Kopcke et al, 2004) refers to the notion that even if the local authorities go on with penalties and punishments, that would not completely deter offenders. Similar is the case when offender does not certain preventive measures, one might argue that the action of potential offenders is similar to a "demand" for more crime. Although private individuals become the victims of crime, a large part of the "market" for crime is handled through the public sector. The public sector takes on a lot of these responsibilities because crime reduction has many attributes of a "public" good. Examples of other public goods are national defence and pollution control. A public good is one in which people who "consume" the good cannot exclude others from consuming. Thus although it might be in everyone's best interest to contribute to a private effort to reduce pollution or to decrease the supply of crime, since those who do not contribute still enjoy the benefits of these efforts, many people will 'free ride' off the expenditures of others. Thus the private marketplace would not supply enough of that good if left to market forces, and the government might be able to make all citizens better off by taxing them and providing the services directly. The "supply" of crime is therefore affected only by 'supply' treatment programs like law enforcement; corrections etc. One of the most common methods to study the relationship between crime and economical infrastructure is the use of census-based areal units and factorial ecological techniques. (Hirschfield & Bowers, 1997) One of the main findings of environmental criminology according to Shaw and McKay (1969) has been the high rate of crime in the central business district and adjoining areas, where both leisure and illicit services have tended to be concentrated. (Shaw & McKay, 1969) According to Lynch & Rasmussen, there is a severe impact of crime not only on business level but also on domestic level where house prices in UK are affected by criminal offences. (Lynch & Rasmussen, 2001) As Rengert notes "If residential burglars travel outside their home neighbourhoods for criminal or non-criminal reasons, they are most likely to go to or towards the centre of the city, which is the hub of transportation and where a variety of (legal and illegal) attractions are located" (Rengert, 1989). The Crime and Disorder Act (1998) has made it legislatory duty on local authorities to work in partnership with their local police to reduce crime and disorder. (Kent, 2000) Partnership refers to various sharing of information in the context of identification of locations to which crime prevention resources need to be focussed and targeted with the help of local authorities or police. For example four of London's cities i.e., Hackney, Brent, Southwark and Harrow have been particularly active in establishing information-sharing arrangements between each community safety partner, and developing strategies to reduce crime and disorder in their local communities. (London, 2007a) Central to these partnerships for the management of this information and the need to identify crime and disorder 'hotspots' has been the use of geographical information systems (GIS). Through the use of GIS, applications to support operational policing, crime and disorder auditing, and crime and disorder prevention initiatives through mapping and analysis have been successfully implemented. (Ghose & Huxhold, 2001) Lynch and Rasmussen (2001) also mention the significance of GIS in detecting crime in particular situations like when housing prices were affected. (Lynch & Rasmussen, 2001) One of the effective tools for combating crime is the usage of 'mapping analysis of spatial patterns of crime'; this not only generates a clearer picture of local criminal activity but also requires help from various legal departments like police and armed forces. In the United Kingdom this interest in mapping patterns of crime is no longer limited to just the police (Levine, 2006). Local Authorities in particular, acting on their new duties following the Crime and Disorder Act (1998), require access to police records on crime and disorder and see mapping these events as an effective way to help inform the process of understanding the location of crime 'hotspots' and the targeting of their community safety resources. However, whilst access to these records between local authority and police partnerships is granted by many local authorities which are still having great difficulty in using police (or other partner's) data. The basic problem with the 'mapping' technique is that most of the data is unable to process easily and requires expensive data encryption for mapping and detection purpose. Therefore cost effectiveness is the major concern for data evaluation and mapping. Garoupa (2000) while listing down the measures to control crime mentions that the most important notion is that Government take such decisions and policies that the opportunity for public to involve in crime gets the least. In this manner the Government must increase market opportunities for the general public. (Garoupa, 2000) Becker holds the opinion that in order to reduce crime rate the best option is to increase the fine to such a level that equal's to the individual's entire wealth. Only in this manner the Government would be able to deter crime rate. (Becker, 1968) Katyal (2002) has provided architectural solutions to combat crime and suggests that since such solutions provide all the practical measures, therefore it really works and reduce crime rate. Among such measures include responsibility on the shoulder of Government to provide proper job openings, parental responsibilities and measures to create awareness among parents about bringing up their children, strict laws regulation and solid educational background. (Katyal, 2002) UK Government considers 'social exclusion' as the main reason for crime increment and suggests that crime rate will not reduce until and unless there is presence of poverty, unemployment, low income, houselessness and bad health. (Marsh, 2004) In Britain, the issue of class is probably more significant than the issue of race, which is an important aspect in visualising crime and therefore helps to categorise different criminal divisions. Davidson (1984) in his study of domestic burglary in Hull found that 60 per cent of offenders confined their activities to the same sort of areas as those they resided in. This tendency was even more pronounced among residents of council housing areas: in fact the only statistically proven factors in detecting offence location were age and tenure. (Davidson, 1984) The most basic reason for the recent emergence of interest in crime mapping is that it has only been quite recently that it has become possible to generate and print detailed maps quickly. For example, map resolution was hitherto constrained by character size when using line printers. Perhaps it is simply that mapping has started to happen because it is easy. But that is not the end of the story. Eck and Weisburd (1995) link the interest in crime places to a change in the focus of criminology from interest in the development of criminal offenders to interest in the development of crime events. If that which is to be explained is the crime act, it is attributes of the act, notably its location, which can aid analysis, detection and prevention. (Eck & Weisburd, 1995) References Anderson R. Lisa & Stafford L. Sarah, (2006) "Does Crime Pay A Classroom Demonstration of Monitoring and Enforcement" In: Southern Economic Journal. Volume: 72. Issue: 4. Becker, Gary S. (1968), "Crime and Punishment: An Economic Approach" In: Journal of Political Economy, 76(2): 169-217 Davidson, R.N. (1984) "Burglary in the community: patterns of localisation in offender-victim relations", in R. Clarke and T. Hope (eds) Coping with Burglary, Boston, MA: Kluwer Nijhoff Eck, J.E. and Weisburd, D. (1995) "Crime places in crime theory", in J.E. Eck and D. Weisburd (eds) Crime and Place, Monsey: Willow Tree Press Garoupa Nuno, (2000) "The Economics of Organized Crime and Optimal Law Enforcement" In: Economic Inquiry. Volume: 38. Issue: 2. Ghose Rina & Huxhold E. William, (2001) "Role of Local Contextual Factors in Building Public Participation GIS: The Milwaukee Experience" In: Cartography and Geographic Information Science. Volume: 28. Issue: 3. Hirschfield, A. and Bowers, K. (1997) "The development of a social, demographic and land use profiler for areas of high crime" In: British Journal of Criminology 37: 103-20 Katyal Neal Kumar, (2002) Yale Law Journal. Volume: 111. Issue: 5. Page Number: 1039 Kent Dooley, (2000) "Basic Rights and Anti-Terrorism Legislation: Can Britain's Criminal Justice (Terrorism and Conspiracy) Act 1998 Be Reconciled with Its Human Rights Act" In: Vanderbilt Journal of Transnational Law. Volume: 33. Issue: 1 Kopcke W. Richard, Sneddon Jane & Tootell Geoffrey, (2004) "How Humans Behave: Implications for Economics and Economic Policy" In: New England Economic Review. Levine Ned, (2006) "Crime Mapping and the CrimeStat Program" In: Geographical Analysis. Volume: 38. Issue: 1. Page Number: 41 London, 2007a Accessed from < www.londonshealth.gov.uk/RTF/hinl2005.rtf> Lynch K. Allen & Rasmussen David, (2001) "Measuring the impact of crime on House Prices" In: Applied Economics, vol. 33, 15. Marsh Alex, (2004) "Housing and the Social Exclusion Agenda in England" In: Australian Journal of Social Issues. Volume: 39. Issue: 1. Rengert, G. (1989) "Spatial justice and criminal victimisation" In: Justice Quarterly 6(4): 543-64 Shaw, C. and McKay, H. (1969) "Juvenile Delinquency and Urban Areas", revised edition, Chicago: University of Chicago Press Read More