Is Baltic Crime Economically Rational?
The purpose of this study is to investigate whether crime in the Baltic countries is governed by economic rationality. According to a simple economic model of rational behaviour, it is expected that the propensity to commit criminal activities should be negatively related to the risk of deterrence. Potential presence of higher risk profiles for certain population segments (urban groups, males, foreigners, the unemployed, and low-income earners) are controlled for. Panel data aggregated to regional levels and observed annually for the years 2000 to 2005 are applied. Controls are applied for endogeneity among criminal activity level and risk of deterrence, intra-regional correlation, inter-temporal heterogeneity and spatial spillover. The expected negative effect of risk of deterrence on criminal activity is found for all countries, whereby the hypothesised economic rationality is confirmed.
Volume (Year): 9 (2009)
Issue (Month): 1 (July)
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