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What You Don't See Can't Hurt You: An Economic Analysis of Morality Laws

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Author Info
Philip A. Curry () (Simon Fraser University)
Steeve Mongrain () (Simon Fraser University)

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Abstract

This paper provides an efficiency explanation for regulation of sex, drugs and gambling (the so-called ``morality laws''). The argument is motivated by the observation that the design an enforcement of these laws often promotes discretion by the people engaging in such activities. We propose that morality laws can be best explained by considering the proscribed activities to impose a negative externality on others when the activity is observed. In such a case, efficiency requires discretion by the individual who engages in such activities. When discretion is difficult to regulate directly, the activities can instead be proscribed thereby giving individuals incentive to hide their actions from others. We find conditions for the first-best levels of consumption and hiding to be implementable. In addition, since some level of activity is efficient, this paper provides another environment in which the optimal sanctions are not maximal.

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File URL: http://www.econ.sfu.ca/research/RePEc/sfu/sfudps/dp07-05.pdf
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Paper provided by Department of Economics, Simon Fraser University in its series Discussion Papers with number dp07-05.

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Length: 20
Date of creation: May 2007
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Handle: RePEc:sfu:sfudps:dp07-05

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Postal: Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
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Related research
Keywords: Crime Externality Laws Morality Enforcement

Other versions of this item:

Find related papers by JEL classification:
K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Polinsky, A. Mitchell & Shavell, Steven, 1984. "The optimal use of fines and imprisonment," Journal of Public Economics, Elsevier, vol. 24(1), pages 89-99, June. [Downloadable!] (restricted)
    Other versions:
  2. Kaplow, Louis, 1990. "A note on the optimal use of nonmonetary sanctions," Journal of Public Economics, Elsevier, vol. 42(2), pages 245-247, July. [Downloadable!] (restricted)
  3. Miron, Jeffrey A & Zwiebel, Jeffrey, 1995. "The Economic Case against Drug Prohibition," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 175-92, Fall. [Downloadable!] (restricted)
  4. James Andreoni, 1991. "Reasonable Doubt and the Optimal Magnitude of Fines: Should the Penalty Fit the Crime?," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 385-395, Autumn. [Downloadable!] (restricted)
  5. Arun S. Malik, 1990. "Avoidance, Screening and Optimum Enforcement," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 341-353, Autumn. [Downloadable!] (restricted)
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