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Crime and moral hazard: Does more policing necessarily induce private negligence?

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  • Guha, Brishti
  • Guha, Ashok S.

Abstract

Even risk-neutral individuals can insure themselves against crimes by combining direct expenditure on security with costly diversification. In such cases — and even when one of these options is infeasible — greater policing often actually encourages private precautions.

Suggested Citation

  • Guha, Brishti & Guha, Ashok S., 2012. "Crime and moral hazard: Does more policing necessarily induce private negligence?," Economics Letters, Elsevier, vol. 115(3), pages 455-459.
    • Handle: RePEc:eee:ecolet:v:115:y:2012:i:3:p:455-459
    DOI: 10.1016/j.econlet.2011.12.105
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Eberhard Feess, 2015. "On the interplay of public and private law enforcement with multiple victims," European Journal of Law and Economics, Springer, vol. 39(1), pages 79-95, February.
    2. Brishti Guha, 2015. "“Inferiority” complex? Policing, private precautions and crime," European Journal of Law and Economics, Springer, vol. 39(1), pages 97-106, February.
    3. Guha, Brishti, 2013. "Guns and crime revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 1-10.
    4. Aaron Chalfin & Benjamin Hansen & Rachel Ryley, 2019. "The Minimum Legal Drinking Age and Crime Victimization," NBER Working Papers 26051, National Bureau of Economic Research, Inc.
    5. Konrad Grabiszewski & Alex Horenstein, 2017. "Product-Consumer Substitution and Safety Regulation," Working Papers 2017-01, University of Miami, Department of Economics.
    6. Konrad Grabiszewski & Alex Horenstein & Nicolo Bates, 2016. "Product-Consumer Substitution and Safety Regulation: Theory and Evidence from Simulation," Working Papers 2016-05, University of Miami, Department of Economics.

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    More about this item

    Keywords

    Crime; Policing; Private precautions; Moral hazard; Diversification;
    All these keywords.

    JEL classification:

    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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