“People decide whether to commit a crime or not, by comparing their expected benefits and costs of crime”.

1. saint louis university
Yulia Sharakina
Economic approach to the
opportunity to commit a crime
“People decide whether to commit a crime or not, by comparing their
expected benefits and costs of crime”.
May 3, 2015

2. Economicapproach to the opportunityto commita crime 2
When approaching crime from the economic point of view, we take into consideration that people act
rationally based on their individual costs and benefits. We also should account for some psychological,
social, and moral factors that determine one’s behavior and induce an individual towards committing a
crime. A rational criminal will keep compelling a crime as long as its marginal benefit covers its marginal
cost. However,when a person decides to devote its life to delinquent activities he understands there are some
opportunity costs he undertakes. For instance, a criminal incurs opportunity costs for time and energy; since
it is logical to think that that time spent in wrongdoing could be devoted to do something else, for example in
more useful things like completing a master’s degree or finding a job.
According to Becker’s economic model, there is a legitimate income opportunity, as opportunity cost to
crime; “a potential criminal identifies some psychic o monetary benefit available through illegal activity,
faces indirect cost of an expected sanction…” –so,income becomes the most immediate opportunity cost of
being engaged in law-breaking conduct (Allen, David). We can call this type of people as “risk takers”?
There is a probability that a criminal can be caught, penalized and, possibly taken into prison. The issue
comes when that person sees more benefits than costs when, let’s say, one decides to steala car.
Habitually, those people who are in bad economic situations, or who do not have high school education in
order to get a reasonable paid job, commit serious crimes. On the other hand, “white-collar”, or sophisticated
individuals, are more traced with misappropriate conducts. This is because poor people see more profits from
stolen money than from possible legal gains; they also do not have anything to lose if get caught (the
opportunity cost of committing a crime is high in this situation). 1
Other type of people who is highly involved in criminal activities are teenagers (the youth). Firstly, they do
not have as high-income alternatives as the adults have, and second, adolescents have a high discount rate1
when estimating the expected future costs of punishment; in other words, they underestimate the possible
consequences of their doings. Despite, the juvenile criminal law is less harsh than the adult’s penalties (it
recognizes their inexperience and immaturity), and weaker penalties serve as a stimulus for delinquency.
1 Discounting: If we want to compare benefits andcosts occurringat different time scales discounting is needed to expressfuture costs or benefits
at today’s equivalent value.

3. Economicapproach to the opportunityto commita crime 3
Furthermore, the high level of recidivism –tendency to repeat a crime, is absorbed among those who have
been already punished for committing an injustice and spent time in prison. For example, you are currently
working in a construction industry and you receive a serious injury, so you are temporally turned off from
work; it does not mean than after recovery you will change the job. A rational worker when chooses a
profession estimates future risks of his labor; so an accident will not affect that choice (G. Becker).
Consequently, offenders, after punishment, usually return to their habitual activity even with a higher desire
of breaking a law; the chance of being caught twice is lower so they feelmore capable of success.
In order to get a complete picture of the total impacts of crime we need to estimate its direct and indirect
costs than burden the society; such costs as those incurred in anticipation of crimes (such as security
expenditures and insurance), and as a consequence of criminal events (such as property stolen and damaged,
emotional and physical impacts and health services), and those beaten costs when taking criminals (“such as
costs to the police, Crown Persecution Service, Legal Aid, costs to the prison and probation services…”),
(Sam Brand, and Richard Price).
According to “The Green Book” (HM Treasury, 1997), the opportunity cost of a resource is “the value of the
resource in its most valuable alternative use”. Here we have two different types of costs, market cost and
personal cost (emotional). For example, consider we are dealing with a “defensive behavior” an individual
may adopt in order to prevent his victimization of crime; he decides to buy a home security system costing
100,000 euros. The money he spent in security could be spent in something else; shopping, vacations, or
food –in this case we say he incurs a monetary cost.
Likewise, that person also suffers from emotional suffering. He fears to stay alone at home during the night,
or taking large trips so that someone can sneak into the house and steal valuable things. Emotional impact
overweighs financial costs (only a victim know how much it cost it). These costs include pain and suffering,
decrease in quality of life, and adverse psychological effects. In such circumstances people’s willingness to
pay (how mucho more) to prevent victimization increases,because we usually prefer to pay more and be
safe. A good example could be de health insurance; so that we pay annually a certain amount that does not
vary, so that in the case of accident we have full health coverage. On the other hand, if we don not have a
health insurance and we get into hospital we would pay just once but much higher amount that we would do
with constant payment.

4. Economicapproach to the opportunityto commita crime 4
Time cost –instead of dealing with crime we could spend more time in leisure or at work, which is defined in
terms of lost output, thus, the entire cost is the loss of productivity and inefficient resource allocation,
because in the absence of crime the resources could be employed in a more productive way such as
improving public services, creating job opportunities, whether than devoting time to the improvement of
security systems, healthcare expenditures, and other economic costs. For example, in US more than 23
million criminal offences committed in 2007 resulted in $15 billion economic losses to the victims and $179
billion in judicial and legal activities (U.S. Department of Justice, 2008).
So, what measures can be undertaken in order to prevent crime and victimization so that the whole society
can be better off?: Evaluation of addition treatment, neighborhood policing, welfare reform programs such as
the improvement of educational system and decrease in unemployment rate,and any other programs should
be regarded further. Chiefly, preserve the family unit (marriage), since there is a higher rate in crime among
children from problematic families. With all these complementarities we can considerably reduce
victimization costs.

5. Economicapproach to the opportunityto commita crime 5
Work Cited
Allen, David W. "Criminals and Victims." Google Books.Stanford University Press,2011. Web. 31 Mar. 2015.
Becker,Gary S., and William M. Landes. Crime and Punishment: An Economic Approach.New York:National
Bureau of Economic Research,1974. NBER. University of Chicago and National Bureau of Economic
Research. Web. 31 Mar. 2015.
"Crime Opportunity Cost Economics." Google Books.US Direct Data,n.d. Web. 01 May 2015.