Question

Criminal Behavior Although Economic Analysis Is Not Particularly Relevant in Explaining Some Crimes of Passion and Violence, It Does Provide Interesting Insights on Such Property Crimes as Robbery, Burglary, and Auto Theft. The theory of rational consumer behavior has been extended to provide some useful insights into criminal behavior. Both the lawful consumer and the criminal try to maximize their total utility (or net benefit). For example, you can remove a textbook from the campus bookstore by either purchasing it or stealing it. If you buy the book, your action is legal; you have fully compensated the bookstore for the product. (The bookstore would rather have your money than the book.) If you steal the book, you have broken the law. Theft is outlawed because it imposes uncompensated costs on others. In this case, your action reduces the bookstore’s revenue and profit and also may impose costs on other buyers who now must pay higher prices for their textbooks. Why might someone engage in a criminal activity such as stealing? Just like the consumer who compares the marginal utility of a good with its price, the potential criminal compares the marginal benefit from his or her action with the “price” or cost. If the marginal benefit (to the criminal) exceeds the price or marginal cost (also to the criminal), the individual undertakes the criminal activity. Most people, however, do not engage in theft, burglary, or fraud. Why not? The answer is that they perceive the personal price of engaging in these illegal activities to be too high relative to the marginal benefit. The price or marginal cost to the potential criminal has several facets. First, there are the “guilt costs,” which for many people are substantial, and the possibility of paying a fine and of going to prison. A criminal may estimate the MB and MC of committing this crime. As an example, suppose that the direct cost and opportunity cost of stealing an $80 textbook are both zero. The probability of getting caught is 10 percent and, if apprehended, there will be a $500 fine. The potential criminal will estimate the marginal cost of stealing the book as $50 (= $500 fine × .10 chance of apprehension). Someone who has a guilt cost of zero will choose to steal the book because the marginal benefit of $80 would exceed the marginal cost of $50. In contrast, someone having a guilt cost of, say, $40 will not steal the book. The marginal benefit of $80 will not be as great as the marginal cost of $90 (= $50 of penalty cost + $40 of guilt cost). This perspective on illegal behavior has some interesting implications. For example, other things equal, crime will rise (more of it will be “bought”) when its price falls. This explains, for instance, why some people who do not steal from stores under normal circumstances participate in looting stores during riots, when the marginal cost of being apprehended has substantially declined. Another implication is that society can reduce unlawful behavior by increasing the “price of crime.” It can nourish and increase guilt costs through family, educational, and religious efforts. It can increase the direct cost of crime by using more sophisticated security systems (locks, alarms, video surveillance) so that criminals will have to buy and use more sophisticated tools. It can undertake education and training initiatives to enhance the legitimate earnings of people who might otherwise engage in illegal activity. It can increase policing to raise the probability of being apprehended for crime. And it can impose greater penalties for those who are caught and convicted.

What are your instinctive “first reflections” on this piece? What have you learned from the Module 3 chapter readings (especially Marginal and Total Utility) that you believe a criminal should be taken into account in coming to the conclusion that perhaps stealing is not such a good idea (to understate it!) Are there crimes for which the probability of getting caught might lead a potential criminal to make the wrong decision? Can this be shown by the a calculation of MB and MC, similar to the one in the earlier paragraph?

Answer 1

Answers-

In my instinctive the first reflection is that any one is not a criminal from birth , the environment in which he/she lives that is the main factor how he reacts and behaves.Criminal behaviour refers to conduct of an offender that leads to and including the commission of an unlawful act.Some are at greater risk of becomining offender because of circumstances into which they are born.Some common reason for committing crimes are - Poverty , Peer Pressure ,Drugs , Politics , Religion , Family Condition, The Society , Unemployment and many more.

I think that a criminal should be taken into account in coming to the conclusion that perhaps stealing is not good idea.I believe that criminal if anyone steals the book they break the law and in this case they are given the punishment and compentation for that crime.The Marginal and Total Utility is that In Economics, Utility refers to a amount of satisfaction that a consumer gain from a particular goods and services. Marginal utility is the satisfaction gained from an extra unit consumed or consuming an additional quantity of that item. Sometimes, economists like to subdivide utility into individual unitsthat they called utils while the Total Utility is the total satisfactionreceived from consuming a given total quality quantity of a good or services.

The crime for getting caught might lead a potential criminal to make the wrong decision is higher probibility for caught crime because he/she is not a genuine criminal. He is not so smart in doing the criminal activities only stoling book is not a very big crime that he think at the ti,e of crime but this is his first step moving in the crime world afer that if he/she could not caught then he/she does another crime also thats why any crime should be punishable and every criminal should be punished by the law.

The MB stands for Marginal Benefits and the MC stands for Marginal Costs.Marginal Benefits and Marginal Costs are the two measure of how the cost or value of a product changes.While the former is the measurement from the consumer side of the equation, the latter is the measurement from producer side. Companies need to take the both concepts into considrations ehen manufacturing the products,pricing,and marketing a product.

Marginal Benefits are the maximum amount a consumer will pay for additional good or service. The Marginal benefits generally decreases as consumption increases. While the Marginal Cost is of production is the change in costs that comes from makinkin more of something.