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Larceny in the Product Market: A Hidden Tax?

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  • Osborne Jackson
  • Thu Tran

Abstract

This paper compares the distortionary impact of larceny theft across different product markets, characterizing such crime as a “hidden tax” on producers or consumers. We estimate the size of this tax and how it is affected by exogenous changes in larceny rates driven by the enactment of higher felony larceny thresholds. Pre-enactment hidden tax rates are small, ranging from 0.1 percent to 0.4 percent. These tax rates rise or fall with enactment, varying by product market. Such exogenous changes in the hidden tax induce state-level annual welfare changes that are minimal, ranging from –$1,500 to $4,700 across product markets.

Suggested Citation

  • Osborne Jackson & Thu Tran, 2020. "Larceny in the Product Market: A Hidden Tax?," Working Papers 20-14, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbwp:89228
    DOI: 10.29412/bosfrb.wp.2020.14
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    References listed on IDEAS

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    More about this item

    Keywords

    larceny thresholds; crime; product markets; taxation; welfare;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law

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