Marginal Deterrence Of Crime example essay topic

The 2002 crime figures for England and Wales comprised of two separate reports, brought together for the first time: (i) Crime statistics recorded by constabularies and (ii) The British Crime Survey (BCS), based on 33,000 interviews. The BCS is regarded as a more reliable measure of actual levels of crime because it includes experiences of crime that go unreported. The British crime survey of 2002 revealed: o Crime rates are stable, showing a slight 2% fall over since 2001 o In 2002, crime fell by 14% since 1999 o In 2002, crime fell by 39% since 1997 However, figures of this type need to be examined in detail. For example, these figures do not show whether the British Government has possibly 'over spent' on crime. Looking at figures of this type do not show the relevance of economic techniques, i.e. marginal deterrence, which was first introduced by Stigler in 1970. This paper has taken a comprehensive, but limited view on the relevance of economics and crime.

Economics can have controversial ideas, and this can be expressed in terms of crime. Economic theory would suggest that there is an 'optimal level of crime'. As Stigler (1970) argues, 'there is one decisive reason why society must forego 'complete' enforcement of the rule: enforcement is costly. ' The extent of enforcement of laws depends upon the amount of resources devoted to the task.

Stigler goes on to argue that society could make certain crime does not pay by paying enough to apprehend most criminals, but such a level of enforcement would of course be expensive. The 'direct costs' are the costs arising from the crime taking place, i.e. damage to property. The 'elimination costs' include costs to society including funding the police force and the prison service. These costs may be calculated using the principle of opportunity cost. The net economic cost of crime to society is thus the difference between what gross domestic product would be if there were neither criminal nor crime prevention activities, and what GDP currently is, given the present state of crime and prevention (Sharp et al, 1996). Thus, there is an optimal level of crime for society.

However, it is very difficult to justify to society that there is an optimal level of particularly devastating crimes like murder. Gary Becker introduced a revolutionary paper in 1968 looking at the relationship of economics and crime. The paper discussed what determines the amount, and the type of resources used to enforce legislation. As a result of Becker's paper, the economic approach to criminal involvement rests on the assumption that most potential criminals are normal individuals. He describes criminals as 'rational, self-interested agents whose behaviour is best understood as an optimal response to the incentives set by the government via expenditures on law enforcement and corrections.

' (Becker 1968). Criminals are not ill or physically deformed, as nineteenth century criminologists believed. As Becker (1968) argued, the criminal will commit a crime if the expected net benefit (utility) from committing the crime exceeds the benefit (utility) derived from legitimate activity. The graph shows the rational decision available to the prospective criminal. The concave line shows the criminal is risk averse, but a straight line (criminal is risk neutral) or a convex line (criminal is a risk lover) could also be used in the argument. If a crime is committed then the criminal can either be at points A or B. At point A the criminal is 100% certain to be caught, and so their punishment in monetary value (L) is deducted from her wealth (W), and receives a utility of U (W-L).

At point B, the criminal is 100% certain not to be caught and therefore the monetary value of the crime (G) is added to their initial wealth (W). As a result, the expected utility of the criminal can be derived as: E (U) = (1-Pc) [U (W+G) ] + Pc [U (W-L) ] Line AB shows all the possible outcomes of utility of the criminal. If the 'next best alternative' of crime falls below wealth W, then a rational decision, even by a risk averse criminal, would be to commit the crime. If the probability of being caught increases, shown by a movement along the line from A to B, the utility gained from the crime will decrease. The diagram shows that in order for the criminal not to commit the crime, the utility that would be gained from the crime would have to be reduced below the level of wealth from the next best alternative.

The marginal deterrence would be the amount of extra law enforcement needed to bring the utility down to this level. Becker (1968) argued that potential criminals will be deterred from committing crimes by an increase in (i) the probability of being caught and punished, and (ii) the amount of punishment if caught, because each of these reduces the expected utility from engaging in criminal activity. Becker's work was elaborated by Ehrlich (1973), using a model of the allocation of time between criminal and legitimate criminal activity. Ehrlich (1973) indicated that economic factors, such as legitimate work, returns to criminal activity and the probability of unemployment, could also exert an effect upon crime rates. It is now important to go on and look at the practical applicability of marginal deterrence. In general, econometric evidence, mainly using recorded crime statistics, lends considerable support to the view that crimes are deterred by increases in the likelihood of being caught, and the severity of the punishment (for a survey see Cameron (1988) for US data, or as suggested by Mookherjee and Png (1994), refer to Wol pin (1978 a) ).

These studies indicate the deterrent effect of certainty of punishment is stronger than the deterrent effect of its severity. Wol phin found only a small, positive correlation between police resources and detection rates. He found that a one percent increase in the number of police per capita increased the conviction rate by 0.6 percent. Pyle (1989) estimates that imprisonment options are considerably cheaper to society than increasing police numbers, despite the bigger response of criminals to certainty rather than severity of punishment. One explanation for this may be due to the fact that offences like burglary and theft are not directly deterred by extra police patrolling. The deterrence effect of punishment is a key economic point.

Deterrence is provided by the effective punishment, which is the size of the punishment multiplied by the probability of conviction. It is the size of this that will determine whether or not the individual commits the crime. Part of the current labour government's policy on crime is to increase the number of police officers throughout the country. However, evidence suggests that this extra money may be better spent elsewhere in crime i.e. increasing the number of prisons. Ehrlich in his paper in 1973, onthe basis of time-series results for the USA between 1933 and 1969, found that one more execution would deter approximately seven or eight murders (the 90% confidence interval was between 0 and 24 murders prevented per execution). Ehrlich (1973) went on to claim that 'the deterrent of execution might be even stronger; as much as twenty to twenty four murders might be deterred by a single execution.

' Although Ehrlich's work has been criticised by authors on the basis it has failed to produce robust estimates of the deterrent effect of execution, it gives this paper an important insight into that when considering the marginal deterrence of crime, it is important to evaluate which part of the law enforcement is actually the deterrent. There is the problem that marginal deterrence of heavy punishments could be very small or even negative. If the offender were to be executed for a minor assault, then there would be no marginal deterrence to murder. Another example used by Stigler (1970) is 'if the thief has his hand cut off for taking five dollars, he had just as well take $5,000. The marginal costs are necessary to marginal deterrence. This would suggest that marginal deterrence implies that 'the punishment should fit the crime.

' The argument is that the more serious crimes should receive higher punishments to prevent criminals from substituting from less serious to more serious crimes. Mookherjee and Png (1994) agreed, and they believe that there are two ways to deter individuals from causing greater harm. One is to raise the penalties for more harmful acts, and the other is to reduce the penalty for, or at the extreme, legalize the less harmful acts. An example of this has just been introduced by the British government in 2004 with the down grading of cannabis from a class B drug to a class C drug. Of course there is also the problem that you can encourage more 'non-criminals' to engage in criminal acts if you were to reduce the penalty of a crime. A lack of marginal deterrence could lead to the criminal receiving a distorted signal.

Economists look at the 'optimal punishment' in order to deter individuals from entering into an illegal act, but one that is the most efficient in maximis ing social gain. It must be decided how much should be spent on punishment in order to achieve the maximum level of marginal deterrence. The type of punishment towards the individual must be considered. A fine (thought of as being a transfer payment in society) as found by Pyle (1995) would be favoured by economists as they are a cheaper form of punishment rather than imprisonment. Becker argues that fines impose no social cost, so if one was interested in minimizing the combined cost of crime, one should increase the value of the fine and at the same time reduce the amount devoted to criminal detection and punishment, so that the probability of punishment falls whilst keeping the expected penalty constant. However, for some crimes i.e. murder, a fine would be impractical.

Firstly it would probably exceed the wealth of the offender, and it is also debatable to what extent such violent acts could be deterred by a financial penalty, and maybe a custodial sentence would be more practical. These were ideas proposed by Shavell (1992). Friedman and Sj ostrom have shown that the optimum penalty for a more serious crime will always exceed that for the less serious crime if the more serious crime also yields larger benefits to the criminal and the number of offenders is finite. Shavell (1992) has argued that marginal deterrence could be achieved by setting cumulative sanctions for the commission of multiple harmful acts. If a criminal kidnaps his victim then this should have a sentence, but if the criminal was to kidnap their victim and then murder them, thus yielding more benefit or reducing the probability of conviction, the sentence should be increased, as then there is less incentive to commit the murder as well as the kidnap. A way of achieving an optimal level of sentencing would be to look at each individual case.

An example would be first time offenders. They are perceived as unlikely to recommit offences and therefore are given lenient sentences as these minimise costs to the state. For each case it is necessary to establish the individual's average, durable propensity to offend based on a sample of observed behaviour. However, arguments against this method include the possibility that the person has offended before and just hasn't been caught, or assessing each individual case may provide less certainty for other prospective criminals and they will therefore be forced to make decisions without the knowledge of what the costs are to them. Punishment does not affect everyone in the same way. Some people may attach negative values to the punishment and therefore the utility they expect to gain from committing a crime may be higher.

Anderson (1976) argued that these people may enjoy benefits of prison like regular meals. Cameron (1988) questioned whether punishment actually does deter crime. He discovered many reasons why punishment may not deter. One example he gave is that increased deterrence efforts may simply cause a displacement effect, shifting criminal activity to a different time or place. This paper can also discuss another possibility of questioning whether punishment actually deters the crime. The current Home Secretary, David Blanket has stressed that Britain faces an almost certain terror threat.

The most likely method of achieving this would be in the form of a suicide bomber. This raises the point that the criminal will not be deterred by the possibility of punishment. Although an extreme case, it is one with some of the most devastating consequence to the British society. In conclusion, the idea of marginal deterrence offers valuable information. It can be used to analyse how the government should spend money on crime in an optimal way thus maximis ing the social benefit, and providing the most efficient law enforcement measures. However, there are problems that may arise.

One major problem is being able to put a monetary value onto emotional gains of the criminal. There are many aspects of crime that have not been explored in this essay. Other areas of work have looked at other possible motives for crime, i.e. crime being related to unemployment, and / or social conditions. The difficulty of trying to establish trends in crime is the reliability of the data.

Crime is often not reported to the police, and government crime figures are often manipulated to give results they want. However, since the first study by Becker in 1968, there has been a tremendous development of crime and economics. There is also a continuing development of society, and it is thought that many of today's crime efforts are not by the state, but instead, they are by private means i.e. burglar alarms.