ABSTRACT
Economists analyze crime with the same approach they use to analyze other kinds of human behavior. According to the economic model of criminal behavior, a person will commit a crime if the expected benefits of the crime exceed its expected costs. The expected benefits of a crime are usually apparent, but what are the expected costs? They would include: the expected costs of punishment; the opportunity cost of the individual’s time and the physical risk involved; and the expenses of supplies used in this occupation, for example false identification, guns, masks, burglar tools, and so on. This chapter reviews an empirical study of racial discrimination in the enforcement of criminal law. It considers the applications of the economic model of crime and punishment to specific crimes. It examines the market for illegal drugs, and then the economics of smuggling. The chapter also considers the effect on the theft of motor vehicles of Lojack, a recent innovation in law enforcement.
