Critically examine the economic model of criminal behaviour and assess its usefulness as a guide to government policy.
...ll quantity (dp) suggests that EU changes by dp[U(Y-f)-U(Y)], which intern must be negative. The cost benefit calculation of the rational criminal implies that, an increase in the probability of detection will reduce the amount of criminal behaviour. The same logic can be applied to an increase in the severity of punishment. This view is not supported by everyone, Cameron lists a number of reasons why the deterrence might not reduce criminal behaviour. He argues that crime might be displaced to another location, time or type of offence. Cameron also believed that an increase in the level of public deterrence might result in a decrease in the level of private deterrence. There are however a few limitations to the analysis above. The model does not take the individual¡¦s attitude to crime. For it merely captures the monetary value of the gains and losses involved. An individual¡¦s like or dislike towards a crime would surely form part of his decision. It does not capture the utility a ¡¥football thug¡¦ may get from engaging in a fight with rival fans. Another problem arises out of uncertainty. The uncertainty in the model only relates to whether the individual will be caught or not. However with a crime such as burglary, the size of the ¡¥loot¡¦ may not be known until the individual enters the premises. Also the punishment if caught may not be known, a warning, caution, fine or prison sentence may be incurred. However the individual may not know which one until he has been caught. Another draw back of this model is that is does not capture the emotional costs involved with same crimes such as Rape and Murder. The probability of being caught, the gain from the crime and the severity of the punishment are not the only variables which influence the decision to commit a crime. The opportunity to commit a crime will have an influence. During the twentieth century the large increase in the theft of automobiles is not unrelated to the increased spread of there ownership. If both the probability of detection and the punishment work as deterrents to crime what policies should be used by a government stop crime? The work of D.J.Pyle has centred on increasing the severity of the punishment rather than increasing the probability of detection. As Pyle felt increasing policing levels to not be as cost effective. However his study was based around cost effectiveness and not the optimal level of crime. Diagram one shows the cost effectiveness of deterrence. For simplistic reason it must be assumed that we have only two alterative forms of deterrence. MC1 Shows the marginal cost of increasing the low cost option, average sentence length, in order to attain an additional unit of deterrence. MC2 shows the marginal cost of increasing the higher cost option, levels of policing, in order to attain an addition unit of deterrence. The line MB shows the marginal benefit of deterrence. It is assumed to be constant and equal for both type of deterrence. The line „¸MC shows the sum of MC1 and MC2. The area under the line „¸MC shows the total cost of particular levels of deterrence. As the government will have a budget, albeit in billions of pounds, they will switch between additional units of sentence length and policing, depending on which one is cheapest in order to achieve an additional unit of deterrence. So if the budget constraint was 0da then 0a should be spent on policing and 0b on increasing prison sentences, in order to be cost effective. MC2 MC1 ƒÃMC MB Cost benefit (₤) d 0 a b c Deterrence Diagram one The government can also use the model to decide whether to use imprisonment or fines. Fines raise revenue for the government with the benefit of being virtually cost free to manage. However imprisonment does have a large advantage as it incapacitates the individual and therefore stop him from committing further acts of crime. Diagram two shows the criminals deterrence indifference curves. They show the combinations of fine and imprisonment, which will result in the same level to reduction in criminal behaviour. Y** Y* a b Fine (₤) Z ...