Criminals and the Price System: Evidence from Czech Metal Thieves

CERGE-EI Working Paper Series No. 558

37 Pages Posted: 16 Feb 2016

See all articles by Josef Montag

Josef Montag

Charles University, Faculty of Law - Department of Economics

Tomáš Brabenec

University of Economics, Prague

Multiple version iconThere are 3 versions of this paper

Date Written: February 1, 2016

Abstract

People steal copper and other nonferrous metals to sell them to scrap yard. Simultaneously, prices at scrap yards are set by the world market. We argue that shocks in metal prices represent a quasi-experimental variation in gains from crime. This allows us to estimate the behavioral parameters of supply of offenses and test the economic theory of criminal behavior. Our estimates suggest that the long-term 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 around unity.

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

JEL Classification: K42, Q31, Q32

Suggested Citation

Montag, Josef and Brabenec, Tomáš, Criminals and the Price System: Evidence from Czech Metal Thieves (February 1, 2016). CERGE-EI Working Paper Series No. 558. Available at SSRN: https://ssrn.com/abstract=2732965 or http://dx.doi.org/10.2139/ssrn.2732965

Josef Montag

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

nam. Curieovych 7
Prague 1, 11640
Czech Republic

Tomáš Brabenec (Contact Author)

University of Economics, Prague ( email )

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

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