The Economic Theory of Criminal Behaviour

Abstract

As we showed in the Introduction the idea that crimes have an economic explanation (e.g. in terms of income and unemployment levels) has a long and distinguished intellectual history. However, the first really rigorous economic theory of criminal participation did not appear until Becker’s now seminal article in the Journal of Political Economy of 1968 (Becker, 1968). In that article Becker argued that criminals behaved basically like all other individuals, in that they attempted to maximise utility subject to a budget constraint. The important distinguishing characteristic of criminal activity (which Becker treated as an aspect of labour supply) was the inherent uncertainty of the rewards associated with it. The possibility of detection and subsequent punishment made the returns from criminal activity uncertain compared with the returns from engaging in legitimate economic activity.