Aug

29

This is a very interesting article on "What Happens to Stolen Bicycles":

It seems as if stealing bikes shouldn't be a lucrative form of criminal activity. Used bikes aren't particularly liquid or in demand compared to other things one could steal (phones, electronics, drugs). And yet, bikes continue to get stolen so they must be generating sufficient income for thieves. What happens to these stolen bikes and how do they get turned into criminal income? 

In 1968, Chicago economist Gary Becker introduced the notion that criminal behavior could be modeled using conventional economic theories. Criminals were just rational actors engaged in a careful cost-benefit analysis of whether to commit a crime. Is the potential revenue from the crime greater than the probability adjusted weight of getting caught? Or, as the antagonist in the movie The Girl Next Door puts it, "Is the juice worth the squeeze?"

Criminal activity (especially crime with a clear economic incentive like theft) could therefore be modeled like any financial decision on a risk reward curve. If you are going to take big criminal risk, you need to expect a large financial reward. Crimes that generate more reward than the probability weighted cost of getting caught create expected value for the criminal. Criminals try to find "free lunches" where they can generate revenue with little risk. The government should respond by increasing the penalty for that activity so that the market equilibrates and there is an "optimal" amount of crime.


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4 Comments so far

  1. Jeff Watson on August 29, 2012 12:52 pm

    In Miami, just out of downtown, there are always rusty looking freighters docked on the Miami River. Many are filled with bicycles, old mattresses, old stoves,etc. The stolen bicycles and other cargoes are usually bound for Haiti. http://www.themiamibikescene.com/2010/07/miami-river-facts.html

  2. Ed on August 29, 2012 9:16 pm

    Singapore seems to have a good handle on this issue. I for one cheered when years ago that American hoodlum was busted stealing (or was it graffiti?) in Singapore and then (after much media protest) caned. I just read about an attempted kidnapping of a 2yr old in downtown Chicago. …Try to steal a KID? Perhaps in a fully sane society that would be worth the death penalty.

  3. douglas roberts dimick on September 2, 2012 3:52 am

    The Systematics of Criminal Economies

    If you want to understand how the modeling of crime is correlated to obfuscation of a rules-based government by two (red and black) polarities within a nation-state, come to Communist China.

    The level of (non)legalized theft here is instituted at each level of political, economic, and social governance.

    One may attribute this form of corruptive nationalization to a dominant lack of natural freedoms to include religion, speech, press, petitioning of greivances, and bearing arms; all are relative, of course, to a free and fair franchise (or right to vote) among the general population.

    dr

  4. Stan Rowen on September 2, 2012 9:45 am

    Mr. Brooks has revealed one of the truly perturbing elements of our society. Borderline or real criminal activity IS currently a financial decision with risk reward considerations. Gone is the moderating influence of religion and morality. The sociopaths of my “baby boom” generation have run amok during the past 15 years, now that many are in prominent positions of power. I could devote pages to providing examples, but anyone who reads regularly can name 10 of their favorite scoundrels without thinking very hard. The cost to society is devastating. Gone are the days of the mid 70’s, when as one condition of employment I had to sign a statement that included the following, “your word is your bond, and your honest reputation is your stock in trade. . .”

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