Economic Model of Crime Analysis
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Questions and Answers

What is the Economic Model of Crime?

  • A model that states a criminal act is performed if the expected benefits from committing a crime exceed the expected costs (correct)
  • A model that ignores the costs involved in crime
  • A model that emphasizes only the social implications of crime
  • A model that suggests crime is always wrong

    • A criminal offense is committed when benefits exceed the ____.

    cost

    What does EB > EC indicate?

    Commit the crime

    What does EB < EC indicate?

    <p>Refrain from crime</p> Signup and view all the answers

    What are the costs of committing a crime?

    <p>All of the above</p> Signup and view all the answers

    What is the opportunity cost of committing a crime?

    <p>The lower a level of income, the lower the opportunity cost of engaging in illegal activity</p> Signup and view all the answers

    What are punishment costs of committing a crime?

    <p>Formal and informal sanctions, and pecuniary costs from litigation</p> Signup and view all the answers

    What does stigma of criminal activity refer to?

    <p>Social or economic inability to find a spouse or job</p> Signup and view all the answers

    What is recidivism?

    <p>Repeat criminal behavior</p> Signup and view all the answers

    How do you estimate an individual's expected penalty?

    <p>Multiply the costs of punishment by the probability of receiving punishment</p> Signup and view all the answers

    What are expected benefits in the context of crime?

    <p>The monetary value of the crime plus non-monetary satisfaction</p> Signup and view all the answers

    What is a discount rate?

    <p>How a person values the present versus the future</p> Signup and view all the answers

    Do criminals have a higher or lower discount rate?

    <p>Higher</p> Signup and view all the answers

    A high discount rate leads to less crime.

    <p>False</p> Signup and view all the answers

    What is the effect of police on crime?

    <p>More police equals less crime</p> Signup and view all the answers

    What negative effects does imprisonment have on crime rates?

    <p>Deterrence and incapacitation</p> Signup and view all the answers

    What is the rarity of capital punishment's impact on crime?

    <p>Reduces or eliminates deterrent effect</p> Signup and view all the answers

    What is the impact of gun laws on crime?

    <p>Mixed results, with some evidence showing concealed handguns decrease crime</p> Signup and view all the answers

    Income has a direct relationship with crime rates.

    <p>False</p> Signup and view all the answers

    How are high wages related to crime rates?

    <p>Lower crime rates</p> Signup and view all the answers

    What correlates with higher levels of crime?

    <p>Higher rates of unemployment</p> Signup and view all the answers

    The unemployed have lower opportunity cost of crime since they are not giving up ____.

    <p>employment</p> Signup and view all the answers

    What is the goal of public law enforcement?

    <p>Deterrence</p> Signup and view all the answers

    What is the purpose of public law enforcement?

    <p>Maximize social welfare</p> Signup and view all the answers

    What occurs when marginal enforcement costs equal marginal enforcement benefits?

    <p>The optimal amount of deterrence</p> Signup and view all the answers

    Factors that indicate the certainty of punishment include probability of punishment, policing levels, arrest rates, and ____.

    <p>conviction rates</p> Signup and view all the answers

    Factors that indicate the severity of punishment include length of prison terms and level of ____.

    <p>fines</p> Signup and view all the answers

    What helps determine a criminal's expected penalty?

    <p>Certainty of punishment and severity of punishment</p> Signup and view all the answers

    All combinations of probability and severity should produce _____ levels of deterrence.

    <p>identical</p> Signup and view all the answers

    What combination of law enforcement achieves deterrence at the lowest possible cost?

    <p>Low certainty/high severity</p> Signup and view all the answers

    What is the preferred sanction according to criminal theory?

    <p>Fines</p> Signup and view all the answers

    A fine should be set as high as possible to an individual's?

    <p>Wealth level</p> Signup and view all the answers

    Sanctions should be as __ as possible and probabilities should be as __ as possible to achieve a given level of deterrence.

    <p>high; low</p> Signup and view all the answers

    Severity of sanctions should increase with?

    <p>Seriousness of the crime</p> Signup and view all the answers

    What is the impact of setting penalties for all offenses at the maximum level?

    <p>There is no reason to not commit a more serious offense</p> Signup and view all the answers

    When may the low certainty/high severity combo no longer be optimal?

    <p>When criminals are risk adverse or risk seeking, for first-time offenders, and for offenders with very high discount rates</p> Signup and view all the answers

    What factors contributed to the decrease in crime during the 1990s?

    <p>Legalization of abortion, receding crack epidemic, rising prison population, and increases in the number of police</p> Signup and view all the answers

    What factors did not contribute to decreases in crime in the 1990s?

    <p>Strong economy, changing demographics, better policing strategies, gun control laws, concealed weapons laws, and increased use of capital punishment</p> Signup and view all the answers

    Study Notes

    Economic Model of Crime

    • Criminal acts occur when expected benefits (EB) outweigh expected costs (EC).
    • The inequality EB > EC indicates a decision to commit a crime.

    Costs of Committing Crime

    • Costs include direct material costs, psychic costs, opportunity costs, and potential punishment costs.
    • Opportunity cost decreases with income levels, making illegal activities more appealing for lower-income individuals.

    Punishment and Recidivism

    • Punishment costs encompass formal penalties (fines, prison) and informal sanctions (stigma).
    • Stigma leads to social consequences (difficulty finding a spouse) and economic challenges (joblessness).
    • Recidivism refers to the tendency to repeat criminal behaviors.

    Expected Benefits and Discount Rate

    • Expected benefits comprise both monetary and non-monetary rewards of crime.
    • Individuals with a high discount rate prioritize immediate gratification over future repercussions.

    Crime Prevention Measures

    • An increase in police presence correlates with a decrease in crime rates.
    • Imprisonment impacts crime reduction through deterrence and incapacitation of offenders.

    Capital Punishment and Gun Laws

    • Rarity of capital punishment diminishes its deterrent effect.
    • Gun laws show mixed evidence; concealed carry may deter crime but results vary.

    Income and Unemployment Correlations

    • No significant correlation between income and crime rates, but high wages lead to lower crime due to increased opportunity costs.
    • Higher unemployment rates are associated with increased crime levels as the unemployed face lower opportunity costs for engaging in crime.

    Law Enforcement Objectives

    • Public law enforcement aims primarily for deterrence and maximizing social welfare.
    • Optimal deterrence occurs when marginal costs of enforcement equate to marginal benefits.

    Certainty and Severity of Punishment

    • Certainty of punishment relies on policing actions, arrest, conviction, and imprisonment rates.
    • Severity is determined by prison terms and financial penalties.

    Deterrence Dynamics

    • An individual's expected penalty combines the certainty and severity of punishment.
    • Ideal deterrence mixes low probability of being caught with high penalties.

    Sanction Preferences

    • Fines are preferred over imprisonment for cost-effective deterrence.
    • Fines should be maximized relative to an individual’s wealth to ensure effective penalties.
    • Notable factors contributing to decreased crime include legalized abortion, a reduction in the crack epidemic, increased prison populations, and higher police numbers.
    • Economic factors, changing demographics, and other policies (e.g., gun control, capital punishment) were not significant contributors to crime reduction during this period.

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    Description

    This quiz explores the economic factors influencing criminal behavior, focusing on the balance of expected benefits and costs. It delves into the consequences of punishment, recidivism, and the effect of income on crime rates. Answer questions to deepen your understanding of these economic principles and crime prevention measures.

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