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One Period Decision-Making Model Of Crime

Decent Essays

Crime is generally perceived as a form of employment in economics as it requires time and effort and generates wealth. This implies that crime and work are substitutes (Witte and Tauchen, 1994). Becker (1968) and Ehrlich (1973) were the first to model the choice between crime and work. The one period decision-making model introduced here is based on their models and illustrates how rational individuals decide whether to engage in a criminal activity by comparing expected benefit and cost. Thus, individuals decide to engage in a criminal activity if: (1-p) U(Wc) - p U(S) > U(WL) (1) where, WC denotes the return from a successful crime, WL denotes the return from an alternative legitimate work and U(.) denotes the utility.

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