Economics of Crime

This paper starts with a review the economics of criminal behavior. Then, the authors discuss the theory of public enforcement. The economic analysis of criminal behavior and criminal law has been a hugely successful enterprise. As an academic enterprise, it has achieved the goal of research—it has generated a large and growing literature. More important than academic success, however, has been the influence of this branch of learning on actual practice. The understanding of deterrence effects and rational responses by criminals has substantially changed the purpose and functioning of the criminal justice system.