Modelling Crime and Punishment

Matti Virén

No 244, Discussion Papers from VATT Institute for Economic Research

Abstract: This paper provides an extended supply of labour model which allows for different intensities of legal and illegal (criminal) activities and in which criminal activities may be considered both as work and leisure. Heterogeneity of individuals is also taken into account. The model is estimated from Finnish aggregate time-series data, pooled Finnish municipalities data and pooled international cross-country data. With the Finnish aggregate data, a volume index of crime is constructed and then used in testing the model. All empirical results give strong support to the hypothesis that apprehension and punishment are important deterrents of crime. By contrast, the role of sosioeconomic and demographic variables turns out to be of little importance.

Keywords: Crime, index theory, crime deterrence, Labour market, Työmarkkinat, Taxation and Social Transfers, Julkisen talouden rahoitus ja tulonsiirrot, A120 - Relation of Economics to Other Disciplines, C400 - Econometric and Statistical Methods: Special Topics: General, J240 - Human Capital; Skills; Occupational Choice; Labor Productivity (Formal Training Programs; On-the-Job Training), K420 - Illegal Behavior and the Enforcement of Law, (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:fer:dpaper:244

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