The changing returns to crime: do criminals respond to prices?

Draca, M., Koutmeridis, T. and Machin, S. (2019) The changing returns to crime: do criminals respond to prices? Review of Economic Studies, 86(3), pp. 1228-1257. (doi: 10.1093/restud/rdy004)

Abstract

To what extent does crime follow the pattern of potential gains to illegal activity? This paper presents evidence on how criminals respond to this key incentive by reporting crime-price elasticities estimated from a comprehensive crime dataset containing detailed information on stolen items for London between 2002 and 2012. Evidence of significant positive crime-price elasticities are shown, for a panel of 44 consumer goods and for commodity related goods (jewellery, fuel and metal crimes). The reported evidence indicates that potential gains are a major empirical driver of criminal activity and a crucial part of the economic model of crime. The changing structure of goods prices helps to explain over 10-15 per cent of the observed fall in property crime across all goods categories, and the majority of the sharp increases in the commodity related goods observed between 2002 and 2012.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Koutmeridis, Dr Theodore
• Authors: Draca, M., Koutmeridis, T., and Machin, S.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: Review of Economic Studies
• Publisher: Oxford University Press
• ISSN: 0034-6527
• ISSN (Online): 1467-937X
• Published Online: 22 January 2018
• Copyright Holders: Copyright © 2018 The Authors
• First Published: First published in Review of Economic Studies 86(3): 1228-1257
• Publisher Policy: Reproduced in accordance with the publisher copyright policy