Property Crime with Private Protection: A Market-for-Offenses Approach
AbstractWe analyze property crime in an endowment economy composed of a large number of heterogeneous individuals who need to protect themselves, choose whether to participate in crime or not, and decide on how to allocate their predation efforts across victims. The equilibrium posits perfect foresight by all and the crime payoff clears the market between victims’ losses and criminals’ gains. We obtain that the crime payoff summarizes all the relevant information concerning the state of the crime environment as far as individual welfare is concerned. The burden of crime, expressed as losses relative to initial wealth, is evenly distributed between rich and poor individuals, inclusive of the protection effort. In absolute terms, the rich spend more on protection and lose more from crime. We derive a necessary and sufficient under which wealth redistribution increases crime. Under a weak sufficient condition, economic development tends to reduce the burden of crime for all, regardless of how its fruits are distributed. The predictions of the model accord well with existing empirical results
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Bibliographic InfoPaper provided by University of Ottawa, Department of Economics in its series Working Papers with number 0901E.
Length: 29 pages
Date of creation: 2009
Date of revision:
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Private Protection; Economic Development; Inequality;
Other versions of this item:
- Hotte, Louis & Valognes, Fabrice & van Ypersele, Tanguy, 2003. "Property Crime with Private Protection: A Market-for-Offenses Approach," CEPR Discussion Papers 3782, C.E.P.R. Discussion Papers.
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-12-19 (All new papers)
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