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Abstract:
Society should give criminals incentives not to conceal their criminal activity. The concealment costs themselves are a social waste, as are other costs the concealment may impose on society, such as additional harm or increased law enforcement expenditures. I show that for any set of sanctions that lead to positive concealment on behalf of the criminal, that society can modify the sanctions to give the criminal an incentive not to conceal and unambiguously improve social welfare. A similar conclusion will apply to increasing the costs of concealment devices to improve social welfare. Society can deter concealment of crime by raising the sanction or raising the cost of concealing the crime. Which policy is chosen should depend upon the concealment device involved. If it is easy to detect the use of a concealment device when a person is caught, then penalties should be imposed on the criminal for using such a concealment device. If the device is of the type that has no legitimate purpose other than being used for concealment, then the device should be heavily taxed or be outlawed. For situations where we are unable to determine whether the device has been used to conceal and the device has legitimate purpose, society should set one penalty for the crime, and possibly a generalized additional sanction for any concealment of the crime that can be determined.

Abstract:
Raising the sanction will always reduce the utility of the criminal. However, raising the sanction will not always lead to less crime, and may lead to more crime. If a criminal has the opportunity to commit multiple criminal acts and has fixed and variable costs of committing these acts, then an increase in the criminal sanction, over a certain range of sanctions, may actually lead the criminal to commit more crime. The reason is that as the sanction is increased, the criminal may increase his expenditures on fixed costs, which may decrease his variable costs of committing a criminal act. Once the criminal pays his fixed costs, they will be sunk costs, and thus they will no longer enter into the criminal's decision process of committing criminal acts. But the variable cost of crime will enter into the criminal's decision process. If raising the sanction leads to decreasing variable costs of crime then raising the sanction may actually lead to more crime. The example of the criminal's decision to purchase a radar detector and to speed is used to illustrate the point.