Optimal Deterrence, Inequality and the Jean-Valjean Effect / W. Bentley MacLeod.

Format:

Book

Author/Creator:

MacLeod, W. Bentley.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31786.

NBER working paper series no. w31786

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Abstract This paper extends the Becker (1968)-Ehrlich (1973) model of crime to allow for government transfers. Using the Shapiro and Stiglitz (1984) model, it is shown that one can view deterrence as a tax on (criminal) labor supply. That in turn allows an integration of a crime model with a standard public finance model. Using King et al. (1988) preferences, it is shown that when individuals are needy or desperate the income effect may dominate the substitution effect. The is that policies undertaken with the intent of deterring crime may, unintuitively, lead to an increase in crime. This provides an alternative to to Becker (1968)'s explanation for persistent crime levels. The results are also consistent with recent research showing that extending social welfare programs can reduce crime. Finally, the policy that minimizes net social costs is characterized by a combination of deterrence and transfers to reduce inequality. This result illustrates how Posner (1973)'s criteria of wealth maximization can imply that reducing inequality is a part of optimal crime policy.

Notes:

Print version record

October 2023.