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  • Chang, Juin-Jen
  • Lu, Huei-Chung
  • Wang, Ping

Abstract

Casual empirical observations reveal no systematic relationship between the overall crime rate and organized criminal activity. We develop a search-theoretic framework to study the interactions not only between formal labor and crime sectors but also between individual and organized crimes. In equilibrium, individual and organized criminals face different arrest risks, success rates, reward structures and outside options. We characterize agents' “occupational choices,” the gang's hierarchical structure and the responses of unemployment, crime rates and crime composition to changes in labor-market conditions and crime-deterrence policies. We further assess the effectiveness of arrest versus punishment policies in deterring individual and organized crimes.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 62 (2013)
Issue (Month): C ()
Pages: 130-153

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Handle: RePEc:eee:eecrev:v:62:y:2013:i:c:p:130-153

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Web page: http://www.elsevier.com/locate/eer

Related research

Keywords: Individual versus organized crimes; Occupational choice; Crime composition; Interdiction and risk-sharing effects;

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References

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  1. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  2. Diamond, Peter A, 1984. "Money in Search Equilibrium," Econometrica, Econometric Society, vol. 52(1), pages 1-20, January.
  3. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2004. "What Accounts For The Decline In Crime?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 707-729, 08.
  4. Abdala Mansour & Nicolas Marceau & Steeve Mongrain, 2006. "Gangs and Crime Deterrence," Journal of Law, Economics and Organization, Oxford University Press, vol. 22(2), pages 315-339, October.
  5. Garoupa, Nuno, 2000. "The Economics of Organized Crime and Optimal Law Enforcement," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 278-88, April.
  6. Eric D. Gould & Bruce A. Weinberg & David B. Mustard, 2002. "Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 45-61, February.
  7. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis Of A Drug-Selling Gang'S Finances," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 755-789, August.
  8. Garoupa, Nuno, 2007. "Optimal law enforcement and criminal organization," Journal of Economic Behavior & Organization, Elsevier, vol. 63(3), pages 461-474, July.
  9. Conley, John P. & Wang, Ping, 2006. "Crime and ethics," Journal of Urban Economics, Elsevier, vol. 60(1), pages 107-123, July.
  10. Juin-Jen Chang & Huei-Chung Lu & Mingshen Chen, 2005. "Organized Crime or Individual Crime? Endogenous Size of a Criminal Organization and the Optimal Law Enforcement," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 661-675, July.
  11. Sah, R.K., 1990. "Social Osmosis And Patterns Of Crime: A Dynamic Economic Analysis," Papers 609, Yale - Economic Growth Center.
  12. Kenneth Burdett & Ricardo Lagos & Randall Wright, 2003. "Crime, Inequality, and Unemployment," American Economic Review, American Economic Association, vol. 93(5), pages 1764-1777, December.
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