This article reconsiders the deterrent effect in the economics of crime according to Becker-Ehrlich's model of optimal allocation of time under uncertainty. In a particular group of crime suppliers, we can think of a certain type of individuals who are concerned with the minimum time allocated to illegal activities. Thus, our analysis is closer in spirit to that of insurance under conditions of risk. It is proved that the aforementioned individuals will increase the minimum time allocated to illegal activities when the subjective probability of apprehension exogenously increases. Some empirical estimates of larceny, in Japan are provided.
ASJC Scopus subject areas
- Economics and Econometrics