Working Paper: CEPR ID: DP10647
Authors: Mirko Draca; Theodore Koutmeridis; Stephen Machin
Abstract: In economic models of crime individuals respond to changes in the potential value of criminal opportunities. We analyse this issue by estimating crime-price elasticities from detailed data on criminal incidents in London between 2002 and 2012. The unique data feature we exploit is a detailed classification of what goods were stolen in reported theft, robbery and burglary incidents. We first consider a panel of consumer goods covering the majority of market goods stolen in the crime incidents and find evidence of significant positive price elasticities. We then study a particular group of crimes that have risen sharply recently as world prices for them have risen, namely commodity related goods (jewellery, fuel and metal crimes), finding sizable elasticities when we instrument local UK prices by exogenous shifts in global commodity prices. Finally, we show that changes in the prices of loot from crime have played a role in explaining recent crime trends.
Keywords: Commodity Prices; Crime; Goods Prices; Metal Crime
JEL Codes: K42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Prices of consumer goods (D19) | Incidence of property crimes (K42) |
| Prices of consumer goods (D19) | Crime-price elasticity (K42) |
| Changes in prices of loot from crime (K42) | Recent crime trends (K42) |
| Falling prices of goods (E31) | Reduction in crime rates (K42) |
| Rising prices in commodity-related crimes (K42) | Increase in thefts (K42) |