Crime, Economics Of

The persistence of criminal activity throughout human history and the challenges it imposes for determining optimal law enforcement activity have attracted the [Page 326]attention of utilitarian philosophers and early economists such as Cesare Beccaria (1738–1794), William Paley (1743–1805), and Jeremy Bentham (1748–1832). It was not until the late 1960s, however, especially following the seminal work by Gary Becker (1968), that economists reconnected with the subject, using the modern tools of economic theory and applied econometrics.

The essence of the economic approach lies in the assumption that potential and actual offenders respond to incentives and that the allocation of public and private resources to law enforcement and other means of crime prevention therefore influences the volume of offenses in the population. The “deterrence hypothesis,” as stated by ...