Do Thieves React to Prices? - Evidence from Gas Stations

Abstract

This study adds to the economic analysis of crime by examining whether fuel theft reacts to different fuel price levels. We cooperated with the State Office of Criminal Investigation Baden-Wuerttemberg and collected data on fuel theft. Thus, we have a unique data set with which we can investigate if and to what extend fuel theft reacts to different fuel price levels. We find that fuel price has a statistically significant positive effect on fuel theft. In the full model we include a lagged detection rate and unemployment as further time-variant variables and control for overall crime by including a crime index.

Keywords: economics of crime, price-theft hypothesis, deterrence hypothesis

JEL Classification: K42