Social Welfare and the Benefits to Crime

Abstract

There exists a large literature on the optimal deterrence of crime. Within the literature, however, there exists a controversy over what the appropriate criterion is to determine optimality. The most popular method is that of maximization of a utilitarian welfare function. The controversy stems from the fact that the benefits to crime are included in the welfare analysis. Another criterion that could be used is that of cost minimization. This paper demonstrates that maximizing the sum of utilities is in fact equivalent to minimizing the costs of crime. The model developed also provides explanations for sanctions that increase in one's criminal history and why necessity may be a partial defense.

Keywords: economics of crime, social welfare

JEL Classification: K14, D63