Theft in equilibrium

Casilda Lasso de la Vega, Oscar Volij and Federico Weinschelbaum

European Economic Review, 2021, vol. 139, issue C

Abstract: We incorporate theft into the standard partial equilibrium model. We focus on two scenarios, one in which the whole wealth is subject to theft, and another in which only final goods are stealable. There are major differences between the two scenarios. In the first one, a policy that increases output reduces crime, which is not necessarily so in the second one. In the first model, public police protection reduces crime, but in the second one it may very well increase it. In the first model, the competitive equilibrium allocates private police efficiently conditional on the crime rate, but does not in the second model. The differences are due to the fact that while in both models output markets affect crime, only in the second model does crime affect output markets.

Keywords: Theft; Economic equilibrium; Appropriation; Police; Crime (search for similar items in EconPapers)
JEL-codes: D72 D74 H23 K42 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Theft in equilibrium (2020)
Working Paper: Theft in equilibrium (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:139:y:2021:i:c:s0014292121001926

DOI: 10.1016/j.euroecorev.2021.103869

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