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Search for a theory of organized crimes

Author

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  • Chang, Juin-Jen
  • Lu, Huei-Chung
  • Wang, Ping

Abstract

Casual empirical observations reveal no systematic relationship between the overall crime rate and organized criminal activity. We develop a search-theoretic framework to study the interactions not only between formal labor and crime sectors but also between individual and organized crimes. In equilibrium, individual and organized criminals face different arrest risks, success rates, reward structures and outside options. We characterize agents' “occupational choices,” the gang's hierarchical structure and the responses of unemployment, crime rates and crime composition to changes in labor-market conditions and crime-deterrence policies. We further assess the effectiveness of arrest versus punishment policies in deterring individual and organized crimes.

Suggested Citation

  • Chang, Juin-Jen & Lu, Huei-Chung & Wang, Ping, 2013. "Search for a theory of organized crimes," European Economic Review, Elsevier, vol. 62(C), pages 130-153.
  • Handle: RePEc:eee:eecrev:v:62:y:2013:i:c:p:130-153
    DOI: 10.1016/j.euroecorev.2013.05.004
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    References listed on IDEAS

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    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
    2. Abdala Mansour & Nicolas Marceau & Steeve Mongrain, 2006. "Gangs and Crime Deterrence," Journal of Law, Economics, and Organization, Oxford University Press, vol. 22(2), pages 315-339, October.
    3. Garoupa, Nuno, 2000. "The Economics of Organized Crime and Optimal Law Enforcement," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 278-288, April.
    4. Diamond, Peter A, 1984. "Money in Search Equilibrium," Econometrica, Econometric Society, vol. 52(1), pages 1-20, January.
    5. Ayse Imrohoroglu & Antonio Merlo & Peter Rupert, 2004. "What Accounts For The Decline In Crime?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(3), pages 707-729, August.
    6. Sah, Raaj K, 1991. "Social Osmosis and Patterns of Crime," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1272-1295, December.
    7. Conley, John P. & Wang, Ping, 2006. "Crime and ethics," Journal of Urban Economics, Elsevier, vol. 60(1), pages 107-123, July.
    8. Steven D. Levitt & Sudhir Alladi Venkatesh, 2000. "An Economic Analysis of a Drug-Selling Gang's Finances," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 755-789.
    9. Eric D. Gould & Bruce A. Weinberg & David B. Mustard, 2002. "Crime Rates And Local Labor Market Opportunities In The United States: 1979-1997," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 45-61, February.
    10. Garoupa, Nuno, 2007. "Optimal law enforcement and criminal organization," Journal of Economic Behavior & Organization, Elsevier, vol. 63(3), pages 461-474, July.
    11. Kenneth Burdett & Ricardo Lagos & Randall Wright, 2003. "Crime, Inequality, and Unemployment," American Economic Review, American Economic Association, vol. 93(5), pages 1764-1777, December.
    12. Juin-Jen Chang & Huei-Chung Lu & Mingshen Chen, 2005. "Organized Crime or Individual Crime? Endogenous Size of a Criminal Organization and the Optimal Law Enforcement," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 661-675, July.
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    Citations

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    Cited by:

    1. Berrittella, Maria & Provenzano, Carmelo, 2016. "An Empirical Analysis of the Public Spending Decomposition on Organized Crime," ET: Economic Theory 232005, Fondazione Eni Enrico Mattei (FEEM).
    2. repec:eee:jeborg:v:141:y:2017:i:c:p:43-63 is not listed on IDEAS
    3. Maria Berrittella & Carmelo Provenzano, 2016. "An Empirical Analysis of the Public Spending Decomposition on Organized Crime," Working Papers 2016.01, Fondazione Eni Enrico Mattei.
    4. Yuki Otsu, 2016. "Crime, Search, and Ex-offenders’ Accessibility to Labor Markets," LABOUR, CEIS, vol. 30(4), pages 393-414, December.

    More about this item

    Keywords

    Individual versus organized crimes; Occupational choice; Crime composition; Interdiction and risk-sharing effects;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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