Criminals and the Price System: Evidence from Czech Metal Thieves

27 Pages Posted: 29 Nov 2014 Last revised: 3 Dec 2014

See all articles by Tomáš Brabenec

Tomáš Brabenec

University of Economics, Prague

Josef Montag

Charles University, Faculty of Law - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: November 1, 2014

Abstract

This paper estimates the elasticity of the supply of offenses with respect to the gains from crime. People steal copper and other nonferrous metals to sell them to a scrap yard. Simultaneously, the prices at scrap yards are set at the world market. We argue, that shocks in metal prices represent a quasi-experimental variation in gains from crime. This allows us to estimate behavioral parameters of supply of offenses and test the economic theory of criminal behavior. Our estimates suggest that the long-run elasticity of supply of metal thefts with respect to the re-sale value of stolen metal is between unity and 1.5. Moreover, the system tends to equilibriate quickly — between 30 and 60 percent of a disequilibrium is corrected the following month and the monthly price elasticity estimates are between 0.9 and unity.

Keywords: economics of crime, gains from crime, metal theft, rational model

JEL Classification: K42, Q31, Q32

Suggested Citation

Brabenec, Tomáš and Montag, Josef, Criminals and the Price System: Evidence from Czech Metal Thieves (November 1, 2014). TILEC Discussion Paper No. 2014-045. Available at SSRN: https://ssrn.com/abstract=2531337 or http://dx.doi.org/10.2139/ssrn.2531337

Tomáš Brabenec

University of Economics, Prague ( email )

nam. W.Churchilla 4
Prague 3, 130 67
Czech Republic

Josef Montag (Contact Author)

Charles University, Faculty of Law - Department of Economics ( email )

nam. Curieovych 7
Prague 1, 11640
Czech Republic

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