Do Criminals Behave Rationally? Evidence from the Franco-German Border
35 Pages Posted: 10 Jan 2016
Date Written: January 8, 2016
In this paper we use a new identification strategy to provide further empirical evidence that criminals behave as predicted by rational choice theory. We collected data from German police administration to build an unique data set that contains monthly fuel thefts at gas station level. In a first step, we use exogenous variation of fuel prices to provide empirical evidence that fuel theft reacts to different fuel prices. In a second step, we find empirical evidence that this price effect is stronger when cost-reducing activities of criminals are additionally taken into account. Thereby, we observe the German border area near France where potential French fuel thieves have better opportunities to get away with fuel theft than their German counterparts.
Keywords: economics of crime, price-theft hypothesis, rational behavior, rational choice theory
JEL Classification: K42, Q31, Q32, R10
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