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Crime and Durable Goods

Sebastian Galiani, Laura Jaitman () and Federico Weinschelbaum ()

Documentos de Trabajo LACEA from The Latin American and Caribbean Economic Association - LACEA

Abstract: We develop a theoretical model to study how changes in the durability of the goods affects prices of stolen goods, the incentives to steal and the equilibrium crime rate. When studying the production of durable goods, we find that the presence of crime affects consumer and producer surplus and thus their behaviour, market equilibrium, and, in turn, the social optimum. Lower durability of goods reduces the incentive to steal those goods, thus reducing crime. When crime is included in the standard framework of durable goods, the socially optimal durability level is lower. When considering different stealing technologies, perfect competition either over-produces durability or produces zero (minimum) durability. The monopolist under-produces durability. The model has a clear policy implication: the durability of goods, and the market structure for those goods, can be an effective instrument to reduce crime. In particular, making the durability of a good contingent upon that good being stolen is likely to increase welfare. We also study the incentives to develop and use this optimal technology.

Keywords: Crime; theft; durability; perfect competition; monopoly; externality; social optimum (search for similar items in EconPapers)
JEL-codes: K00 K42 D40 D62 (search for similar items in EconPapers)
Pages: 36
Date: 2018-07-05
New Economics Papers: this item is included in nep-law and nep-ure
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Related works:
Journal Article: Crime and durable goods (2020) Downloads
Working Paper: Crime and Durable Goods (2016) Downloads
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