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Crime and Durable Goods

Author

Listed:
  • Sebastian Galiani
  • Laura Jaitman
  • Federico Weinschelbaum
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.

Suggested Citation

  • Sebastian Galiani & Laura Jaitman & Federico Weinschelbaum, 2016. "Crime and Durable Goods," NBER Working Papers 22788, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:22788
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    References listed on IDEAS

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    Cited by:

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    4. Diego De la Fuente, 2024. "Remittance Income and Crime in Mexico," Working Paper Series 1024, Department of Economics, University of Sussex Business School.

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    JEL classification:

    • K0 - Law and Economics - - General
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)

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