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The changing returns to crime: do criminals respond to prices?

Draca, Mirko, Koutmeridis, Theodore and Machin, Stephen (2019) The changing returns to crime: do criminals respond to prices? Review of Economic Studies, 86 (3). 1228 – 1257. ISSN 0034-6527

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Identification Number: 10.1093/restud/rdy004

Abstract

To what extent does crime follow the pattern of potential gains to illegal activity? This article presents evidence on how criminals respond to this key incentive by reporting crime–price elasticities estimated from a comprehensive crime dataset containing detailed information on stolen items for London between 2002 and 2012. Evidence of significant positive crime–price elasticities are shown, for a panel of 44 consumer goods and for commodity related goods (jewellery, fuel, and metal crimes). The reported evidence indicates that potential gains are a major empirical driver of criminal activity and a crucial part of the economic model of crime. The changing structure of goods prices helps to explain over 10–15% of the observed fall in property crime across all goods categories, and the majority of the sharp increases in the commodity related goods observed between 2002 and 2012.

Item Type: Article
Official URL: https://academic.oup.com/restud
Additional Information: © 2018 The Authors
Divisions: Centre for Economic Performance
Economics
Subjects: H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
Date Deposited: 20 Sep 2019 09:48
Last Modified: 18 Oct 2019 23:10
URI: http://eprints.lse.ac.uk/id/eprint/101679

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