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Criminals and the Price System: Evidence from Czech Metal Thieves

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  • Tomas Brabenec
  • Josef Montag

Abstract

People steal copper and other nonferrous metals to sell them to scrap yard. Simultaneously, prices at scrap yards are set by the world market. We argue that shocks in metal prices represent a quasi-experimental variation in gains from crime. This allows us to estimate the behavioral parameters of supply of offenses and test the economic theory of criminal behavior. Our estimates suggest that the long-term elasticity of supply of metal thefts with respect to the re-sale value of stolen metal is between unity and 1.5. Moreover, the system tends to equilibriate quickly—between 30 and 60 percent of a disequilibrium is corrected the following month and the monthly price elasticity estimates are around unity.

Suggested Citation

  • Tomas Brabenec & Josef Montag, 2016. "Criminals and the Price System: Evidence from Czech Metal Thieves," CERGE-EI Working Papers wp558, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp558
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    References listed on IDEAS

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    Cited by:

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    2. Ajide, Folorunsho M., 2021. "Fiscal Policy and Crime Rate in Nigeria," African Journal of Economic Review, African Journal of Economic Review, vol. 9(4), September.
    3. Yu Aoki & Theodore Koutmeridis, 2019. "Shaking Criminal Incentives," Working Papers 2019_13, Business School - Economics, University of Glasgow.
    4. Aoki, Yu & Koutmeridis, Theodore, 2019. "Shaking Criminal Incentives," IZA Discussion Papers 12781, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    economics of crime; gains from crime; metal theft; rational model;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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