Crime and Punishment

(O’Sullivan, Ch. 16)© Allen C. Goodman 2006

Optimum Amount of Crime

• Is it ZERO?– NO !!!

• Why not?

• Because it is too costly to get to zero.

• Look at PREVENTION COST and VICTIM COST.

Prevention Cost

• Hardening the target.

• Increasing the probability of arrest.

• Increasing probability of imprisonment.

• Increasing severity of punishment.

• Increasing the value of legal opportunities.

Total Cost Analysis

• Suppose, w/ no prevention, we would have 100 burglaries/day.

• It costs $ to reduce burglaries, at increasing rate.

# of burglaries

0 100

Cos

t of

Bur

glar

ies

Victim cost

Prevention cost

Total cost

B*

What does this say?

• It is efficient to prevent some of the crimes.

• It is less efficient to try to prevent all of them.

• One could draw a similar diagram for pollution. Discuss.

# of burglaries

0 100

Cos

t of

Bur

glar

ies

Victim cost

Prevention cost

Total cost

B*

Marginal Cost Analysis

• It is at least as (if not more) useful to deal with marginal changes.

• Marginal prevention costs.

• Marginal victim costs.

# of burglaries

0 100

Cos

t of

Bur

glar

ies

Mgl Victim cost

Mgl Prevention cost

B*

Marginal Cost Analysis

• Suppose the prevention costs of robbery are the same as burglary.

• Victim costs for robbery are higher.

• Optimal # of burglaries is higher than optimal # of robberies.

# of crimes

0 100

Cos

t of

Bur

glar

ies

MVC -B

Mgl Prevention cost

B*

MVC -R

R*

Broken Windows

• Is it reality, or appearance (the broken windows) that is important?

• What is more important, total or marginal impacts?– What does that imply about the deployment of

resources?

• How does the individual relate to the community?

Crime Prevention Activities

• Fundamentally, we want to reduce the return to criminal activities– Increase value of legal opportunities– Harden the targets– Decrease the value of the loot– Increase arrest rates– Increase conviction rates– Increase sentences

Table 16-3 Expected Benefits and Costs for a Burglary

Benefits and CostsBurglary Activity

InsertExpected Loot

Loot 600Probability of Success 0.80Expected Loot 480.00

Expected CostProbability of Arrest 0.16Probability of Prison 0.13Joint Probability 0.021Opportunity Cost of Prison Daily wage 40 Expected Workdays 150 Foregone Income 6000Cost of Lost Freedom 2000Opportunity Cost/Yr. 8000Expected Cost 166.40

Expected Net Benefit from Burglary 313.60

Legal ActivityDaily Income 40.00

Net Return 273.60

Worksheet

Crime Prevention Activities

Increase value of legal opportunities

Table 22-3 Expected Benefits and Costs for a Burglary

Benefits and CostsBurglary Activity

InsertExpected Loot

Loot 600Probability of Success 0.80Expected Loot 480.00

Expected CostProbability of Arrest 0.16Probability of Prison 0.13Joint Probability 0.021Opportunity Cost of Prison Daily wage 40 Expected Workdays 150 Foregone Income 6000Cost of Lost Freedom 2000Opportunity Cost/Yr. 8000Expected Cost 166.40

Expected Net Benefit from Burglary 313.60

Legal ActivityDaily Income 40.00

Net Return 273.60

Crime Prevention ActivitiesTable 22-3 Expected Benefits and Costs for a Burglary

Benefits and CostsBurglary Activity

InsertExpected Loot

Loot 600Probability of Success 0.80Expected Loot 480.00

Expected CostProbability of Arrest 0.16Probability of Prison 0.13Joint Probability 0.021Opportunity Cost of Prison Daily wage 40 Expected Workdays 150 Foregone Income 6000Cost of Lost Freedom 2000Opportunity Cost/Yr. 8000Expected Cost 166.40

Expected Net Benefit from Burglary 313.60

Legal ActivityDaily Income 40.00

Net Return 273.60

Harden the targets, or

Decrease the value of the loot.

Crime Prevention ActivitiesTable 22-3 Expected Benefits and Costs for a Burglary

Benefits and CostsBurglary Activity

InsertExpected Loot

Loot 600Probability of Success 0.80Expected Loot 480.00

Expected CostProbability of Arrest 0.16Probability of Prison 0.13Joint Probability 0.021Opportunity Cost of Prison Daily wage 40 Expected Workdays 150 Foregone Income 6000Cost of Lost Freedom 2000Opportunity Cost/Yr. 8000Expected Cost 166.40

Expected Net Benefit from Burglary 313.60

Legal ActivityDaily Income 40.00

Net Return 273.60

Increase the arrest, orthe conviction rate.

Crime Prevention Activities

Table 16-3 Expected Benefits and Costs for a Burglary

Benefits and CostsBurglary Activity

InsertExpected Loot

Loot 600Probability of Success 0.80Expected Loot 480.00

Expected CostProbability of Arrest 0.16Probability of Prison 0.13Joint Probability 0.021Opportunity Cost of Prison Multiply Daily wage 40 costs by Expected Workdays 150 more Foregone Income 6000 yearsCost of Lost Freedom 2000Opportunity Cost/Yr. 8000Expected Cost 168.00

Expected Net Benefit from Burglary 312.00

Legal ActivityDaily Income 40.00

Net Return 272.00

Increase the sentence

Deterrence and Criminal Activity

• Idea. Criminals do crime as a rational activity. Pick the activity that provides the highest return.

• Punishing some activities may deter some criminals from crime. May push others into different crimes.

Deterrence and Criminal Activity

• Stiffer penalties might cause some criminals to upgrade to more serious crime.

• Might cause some criminals to downgrade to less serious crime.

• May cause some not to be criminals.

• Some economists try to use same analyses for “crimes of passion.” Results are mixed.