Citation

İmrohoroğlu A, Merlo A, Rupert P. Int. Econ. Rev. 2000; 41(1): 1-26.

Copyright

(Copyright © 2000, Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association, Publisher John Wiley and Sons)

DOI

10.1111/1468-2354.00053

PMID

unavailable

Abstract

This article analyzes a general equilibrium model in which agents choose to specialize in either legitimate or criminal activities. Expenditures on police to apprehend criminals, as well as income redistribution, are determined endogenously through majority voting. We investigate how crime, redistribution, and police expenditures depend on characteristics of the underlying distribution of income-earning abilities and on the apprehension technology. Our model accounts for the positive correlation between inequality and crime, the positive correlation between expenditures on police and redistribution, and the lack of correlation between crime and redistribution observed in U.S. data.