Property Crime with Private Protection: A Market-for-Offenses Approach

35 Pages Posted: 17 Aug 2003 Last revised: 29 May 2008

See all articles by Louis Hotte

Louis Hotte

University of Ottawa

Fabrice Valognes

Facultés Universitaires Notre-Dame de la Paix (FUNDP) - Faculty of Economics, Management and Social Sciences

Tanguy Van Ypersele

National Center for Scientific Research (CNRS) - Research Group in Quantitative Saving (GREQAM); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: January 15, 2003

Abstract

We analyse property crime in an economy composed of a large number of heterogeneous individuals who need to protect themselves. The crime equilibrium is modeled as a free-access equilibrium in which the match between criminals and victims equates the average returns to crime. The supply and toleration for crime are endogenized taking into account incentives to participate in criminal activities and individual protection decisions. We first observe that individual welfare is positively affected by the gross returns to crime. We then obtain that the share of wealth lost to crime and spent on private protection is the same for all individuals, regardless of their initial wealth. And although economic growth has ambiguous effects on the crime rate and the aggregate value of stolen goods, it unambiguously improves the welfare of all, regardless of how the fruits from growth are spread among the population. Finally, we argue that whether redistribution or public enforcement is more effective in reducing crime depends crucially on how well one can target a certain group of individuals.

Keywords: crime, economic development, inequality, private protection, public enforcement and redistribution

JEL Classification: D63, D74, K42, O17

Suggested Citation

Hotte, Louis and Valognes, Fabrice and Van Ypersele, Tanguy, Property Crime with Private Protection: A Market-for-Offenses Approach (January 15, 2003). CEPR Discussion Paper No. 3782; CLEA 2008 Meetings Paper. Available at SSRN: https://ssrn.com/abstract=412900 or http://dx.doi.org/10.2139/ssrn.412900

Louis Hotte (Contact Author)

University of Ottawa ( email )

Department of Economics
55 Laurier E.
Ottawa, Ontario K1N 6N5
Canada
+161 356 25800 1692 (Phone)
+161 356 25999 (Fax)

HOME PAGE: http://aix1.uottawa.ca/~lhott3/

Fabrice Valognes

Facultés Universitaires Notre-Dame de la Paix (FUNDP) - Faculty of Economics, Management and Social Sciences ( email )

Rempart de la Vierge 8
B-5000 Namur
Belgium

HOME PAGE: http://www.fundp.ac.be/recherche/personnes/fr/01004310.html

Tanguy Van Ypersele

National Center for Scientific Research (CNRS) - Research Group in Quantitative Saving (GREQAM) ( email )

Centre de la Vieille Charité
2 rue de la Charité
Marseille, 13002
France
+33 4 4293 5983 (Phone)
+33 4 4293 0968 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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