Imperfect Credit Markets and Crime

Baumann Florian () and Tim Friehe
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Baumann Florian: Center for Advanced Studies in Law and Economics, University of Bonn, Adenauerallee 24–42, 53113 Bonn, Germany

Review of Law & Economics, 2017, vol. 13, issue 2, 15

Abstract: This paper analyzes the link between individual crime choices and imperfect credit markets. The study shows that, by affecting the equilibrium lending rate, credit market characteristics such as the mark-up required by lenders or the severity of information asymmetries between lenders and loan applicants influence the extent of crime. For example, higher mark-ups incite more crime when less borrowing makes the criminal opportunity more tempting. Similarly, law enforcement policies may impact on the credit market equilibrium.

Keywords: credit market; crime; public policy (search for similar items in EconPapers)
JEL-codes: D14 K42 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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DOI: 10.1515/rle-2015-0011

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