Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
884543 | Journal of Economic Behavior & Organization | 2007 | 13 Pages |
Abstract
We show that if the punishment for a property crime effectively eliminates an individual’s initial wealth, as with a very long prison sentence, then such criminal activities become less desirable for a risk-averse and prudent individual if his initial wealth distribution undergoes a second-order stochastic dominant improvement. Similar results obtain under additional restrictions if the punishment reduces an individual’s initial wealth by some factor less than 1. In a general-equilibrium model where the endogenous victimization risk is part of individuals’ background risks, we also show that the availability of insurance for the victimization risk lowers economy-wide crime rates.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
W.Henry Chiu, Paul Madden,