• Shawn
    13.1k
    Nobel prize winner Gary Becker postulated a utility maximization framework to describe an individual's participation in a crime. Certain crimes have clear economic rewards, but most criminal behaviors have costs.

    Here is his general function:

    y = f ( x1 , x2 , x3 , x4 , x5 , x6 , x7 )

    y is hours spent in criminal activities,
    x1 is 'wage' for an hour spent in criminal activity
    x2 is hourly wage in legal employment
    x3 is income other than from crime or employment
    x4 is probability of getting caught
    x5 is probability of being convicted if caught
    x6 is expected sentence if convicted, and
    x7 is age.

    Other factors generally affect a person's decision to participate in a crime, but the list above is representative of what might result from a formal economic analysis. The function, denoting y, depends on an underlying utility function, which is rarely known.
    — Jeffrey M. Wooldridge, Introductory Economics : A Modern Approach, 4e, page 3.

    I would like to address the italicized text. It is important that we not only crunch numbers; but, also try and understand why their values are the way they are, along with knowing how to assign them values. How would you explain the underlying utility function for crime and how would you address it? I'll go first.

    Addressing each variable:

    x1 is dependent on the socio-political climate and monetary reward for such activity. If the 'wage' is high enough, deterrence is the only solution, assuming that certain people are lured by criminal activity over other factors.

    x2 is dependent on socio-economic factors that are often beyond the control of the individual.

    x3 depends on prosperity and social spending and amount of effort put into the attainment of money via legal means by an individual.

    x4, dependent on spending on policing.

    x5 is dependent on laws and politico-ideological motivations in the formulation of certain laws.

    x6 is for all purposes the same or similar to x5

    x7 is to be assumed that we are only addressing young people who are prone to crime for monetary gain (drug dealing, prostitution, etc.)

    How I would try and minimize y:

    Maximize x2. This is assuming that we are again talking about x7 being people who are prone to commit a crime for the first time due to poverty.

    Maximize x3. In my mind, this is entirely dependent on factors that are both micro and macroscopic. If a person is plain lazy and not motivated to make money the legal way, which is obviously less lucrative than crime, then a social program seems to be required here or some form of public education of the consequences of engaging in criminal activity. Social spending in one word would likely bring the greatest means to increase the value of x3.

    x4 or the probability of getting caught is probably the most important and effective means in combating crime. This premise is a strong motivating factor for the inspiration of many books, movies, and politico-philosophical theories of governing.

    As for x5, should we follow in the footsteps of China or be more like Sweden in the severity and type of punishment? It seems the rationale in preventing crime according to left wingers and right wingers is tremendous. As a side question, although a very important one and philosophically interesting, why the profound variation between such groups of people?

    x6 and x5 are for all intents and purposes similar in light.

    x7 has already been addressed.
  • unenlightened
    9.1k
    Murder, rape, littering, speeding, drug-taking, are not in general motivated by maximising utility.This analysis might work for psychopathic economists committing economic crimes, but it has little application to the rest of us.
  • Shawn
    13.1k


    I think the issue presented above is not one of the types of crimes you mentioned or things a repeat offender would do.

    The issue is to decrease the lure for young lads to engage in criminal activity that brings in a handsome profit.
  • unenlightened
    9.1k
    The issue is to decrease the lure for young lads to engage in criminal activity that brings in a handsome profit.Question

    Yes. That was my point; that even amongst young lads, profit is a very much a minority consideration. Excitement, rebellion, revenge for perceived wrongs, and plain aggression and hatred are more significant motives in most cases. In other words, the analysis is completely inadequate, Nobel prize notwithstanding.
  • Shawn
    13.1k


    But, why is it that crime is so low in other places in the world if every young person is feeling inclined at some age to be 'rebellious'. Seems like an oversimplification being made here.

    How would you explain the phenomenon of 'prostitution'? It seems like something not motivated by any sick passion and instead monetary gain at the expense of... well, a lot of things.
  • mcdoodle
    1.1k
    There's a rather dogmatic, but nevertheless to me greatly enjoyable, series of blogs by Bill Black outlining problems with Gary Becker's approach to rationality, discrimination and crime.

    Bill Black's blogs
  • ernestm
    1k
    But, why is it that crime is so low in other places in the world if every young person is feeling inclined at some age to be 'rebellious'. Seems like an oversimplification being made here.Question

    That's really impossible to know, but it seems to me that people in different cultures do different things to express their rebellion, and different cultures have different values affecting the seriousness of different rebellious acts.. Bedouin teens sneak into other camps and steal sheep, usually, which is greatly frowned upon but not considered a crime.
  • andrewk
    2.1k
    What a classic, blinkered economist way of analysing things. Look at the input variables. Not one of them has anything to do with feelings, and yet feelings are the primary motivator of everything we do. Leaving the function unspecified provides no worthwhile flexibility if none of the inputs relate to the main drivers.

    According to the above framework, somebody is likely to murder their child to sell the body parts for organ transplants, provided they don't expect to be caught.

    Even classical finance economists allow for feelings in their calculations about people's investment decisions, via risk-aversion parameters. How much more important a role are feelings likely to play in analysing crime than investment decisions.

    Either J Wooldridge has been taken out of context, or he needs to do some remedial study in Behavioural Economics.
  • Shawn
    13.1k
    The function, denoting y, depends on an underlying utility function, which is rarely known.

    I think that addresses the 'inner life that motivates' a criminal.
  • andrewk
    2.1k
    No, look at the function more closely. It cannot address it, because it has no inputs that indicate either the nature of the crime, or who the individual is that is contemplating it. So it will come up with the same results for murder as it does for jaywalking, and the same results for a psychopath as for a saint, if the other inputs are the same - which they very easily could be.

    The only way out of this is to either

    • introduce additional function inputs that denote the individual and the crime; or
    • have different functions for different individuals and different crimes

    but then the whole superficial simplicity of the approach starts to unravel.
  • Shawn
    13.1k
    but then the whole superficial simplicity of the approach starts to unravel.andrewk

    But, that's what's so elegant about it. I mean sure, if we had a Stasi database on the psychological profile and motives of every citizen, then technically, you could deduce his or her probability in committing crime. But, that's just unrealistic but I doubt that would stop the FBI/CIA/NSA, lol!
  • andrewk
    2.1k
    But, that's what's so elegant about it.Question
    Sure - elegantly wrong.

    To me, a necessary condition for a solution being elegant is that it doesn't give nonsensical answers.
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