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Economics of Crime

Economics of crime is a field of research comprising both positive (descriptive) and normative analyses of crime. In the descriptive part, crime is typically seen as a result of rational choices that depend on individuals’ expected rewards and costs of violating the law. People are assumed to rationally choose activities, legal or illegal, that best satisfy their preferences for money, consumption, sex, excitement, revenge, and more. Just as consumers respond to changes in prices and incomes, potential offenders are assumed to respond to changes in sanctions and gains from illegal and legal activities. In empirical studies, the hypothesis that expected sanctions deter crime is tested, and the quantitative effect on crime of various possible incentives is estimated. In normative analyses, it is commonly assumed that ...

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