A general equilibrium model of crime and punishment

A model of crime and punishment is developed where individuals who differ in their earnings abilities choose between work and crime, taking the probability and consequences of punishment into account. An aggregate relationship between the probability of punishment and the level of crime is derived. There is also a relationship between enforcement spending, the number of criminals and the number punished. In such an economy, the possibility of multiple equilibria and the effects of changes in enforcement spending and in inequality on the levels of crime and punishment are discussed; there is also discussion of social welfare and voting behavior. (C) 1999 Elsevier Science B.V. All rights reserved. JEL classification: D72; K42.