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Measuring Positive Externalities From Unobservable Victim Precaution: An Empirical Analysis Of Lojack

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Author Info
Ian Ayres
Steven D. Levitt

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Abstract

Lojack is a hidden radio-transmitter device used for retrieving stolen vehicles. Because there is no external indication that Lojack has been installed, it does not directly affect the likelihood that a protected car will be stolen. There may, however, be positive externalities due to general deterrence. We find that the availability of Lojack is associated with a sharp fall in auto theft. Rates of other crime do not change appreciably.At least historically,the marginal social benefit of an additional unit of Lojack has been fifteen times greater than the marginal social cost in high crime areas. Those who install Lojack, however, obtain less than 10 percent of the total social benefits, leading to underprovision by the market. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Publisher Info
Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 113 (1998)
Issue (Month): 1 (February)
Pages: 43-77
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Handle: RePEc:tpr:qjecon:v:113:y:1998:i:1:p:43-77

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  1. Levitt, Steven D, 1997. "Using Electoral Cycles in Police Hiring to Estimate the Effect of Police on Crime," American Economic Review, American Economic Association, vol. 87(3), pages 270-90, June. [Downloadable!] (restricted)
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  2. de Meza, David & Gould, J R, 1992. "The Social Efficiency of Private Decisions to Enforce Property Rights," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 561-80, June. [Downloadable!] (restricted)
  3. Freeman, Richard B, 1996. "Why Do So Many Young American Men Commit Crimes and What Might We Do about It?," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 25-42, Winter. [Downloadable!] (restricted)
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  4. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169. [Downloadable!] (restricted)
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  5. Clotfelter, Charles T., 1978. "Private security and the public safety," Journal of Urban Economics, Elsevier, vol. 5(3), pages 388-402, July. [Downloadable!] (restricted)
  6. Black, Dan A & Nagin, Daniel S, 1998. "Do Right-to-Carry Laws Deter Violent Crime?," Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 209-19, January.
  7. Shavell, Steven, 1991. "Individual precautions to prevent theft: Private versus socially optimal behavior," International Review of Law and Economics, Elsevier, vol. 11(2), pages 123-132, September. [Downloadable!] (restricted)
  8. Hui-Wen, Koo & Png, I. P. L., 1994. "Private security: Deterrent or diversion?," International Review of Law and Economics, Elsevier, vol. 14(1), pages 87-101, March. [Downloadable!] (restricted)
  9. Steven Shavell, 1990. "Individual Precautions to Prevent Theft: Private Versus Socially OptimalBehavior," NBER Working Papers 3560, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Ben-Shahar, Omri & Harel, Alon, 1995. "Blaming the Victim: Optimal Incentives for Private Precautions against Crime," Journal of Law, Economics and Organization, Oxford University Press, vol. 11(2), pages 434-55, October.
  12. Cameron, Samuel, 1988. "The Economics of Crime Deterrence: A Survey of Theory and Evidence," Kyklos, Blackwell Publishing, vol. 41(2), pages 301-23.
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  1. Manuel Trajtenberg, 2006. "Defense R&D In The Anti-Terrorist Era," Defence and Peace Economics, Taylor and Francis Journals, vol. 17(3), pages 177-199, June. [Downloadable!] (restricted)
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  2. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2006. "Crime Distribution & Victim Behavior During a Crime Wave," William Davidson Institute Working Papers Series wp849, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  3. Manuel Trajtenberg, 2003. "Defense R&D Policy in the Anti-terrorist Era," NBER Working Papers 9725, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Jeremy Bulow & Paul Klemperer, 1999. "The Tobacco Deal," HEW 9904002, EconWPA. [Downloadable!]
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  5. Dean Yang, 2004. "Can Enforcement Backfire? Crime Displacement in the Context of Customs Reform in the Philippines," Working Papers 520, Research Seminar in International Economics, University of Michigan. [Downloadable!]
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  6. Ann Dryden Witte & Robert Witt, 2001. "What We Spend and What We Get: Public and Private Provision of Crime Prevention," NBER Working Papers 8204, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Arai, Mahmood & Skogman Thoursie, Peter, 2006. "Giving up Foreign Names: An Empirical Examination of Surname Change and Earnings," Research Papers in Economics 2006:13, Stockholm University, Department of Economics. [Downloadable!]
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  8. Alexander Muermann & Howard Kunreuther, 2007. "Self-Protection and Insurance with Interdependencies," NBER Working Papers 12827, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Earl L. Grinols & David B. Mustard, 2005. "Casinos, Crime, and Community Costs," Law and Economics 0501001, EconWPA. [Downloadable!]
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  10. Daniel S. Hamermesh, 1998. "Crime and the Timing of Work," NBER Working Papers 6613, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Li Gan & Roberton C. Williams III & Thomas Wiseman, 2004. "A Simple Model of Optimal Hate Crime Legislation," NBER Working Papers 10463, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2006. "Crime Distribution and Victim Behavior during a Crime Wave," Working Papers 0044, CEDLAS, Universidad Nacional de La Plata. [Downloadable!]
  13. Philip J. Cook & Jens Ludwig, 2002. "The Effects of Gun Prevalence on Burglary: Deterrence vs Inducement," NBER Working Papers 8926, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Alexander Muermann & Howard Kunreuther, 2008. "Self-protection and insurance with interdependencies," Journal of Risk and Uncertainty, Springer, vol. 36(2), pages 103-123, April. [Downloadable!] (restricted)
  15. Hannes Spengler, 2005. "Eine panelökonometrische Überprüfung der ökonomischen Theorie der Kriminalität mit deutschen Bundesländerdaten," Darmstadt Discussion Papers in Economics 150, Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology), revised Jan 2006. [Downloadable!]
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  16. Darius Lakdawalla & Eric Talley, 2006. "Optimal Liability for Terrorism," NBER Working Papers 12578, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Rafael Di Tella & Ernesto Schargrodsky, 2004. "Do Police Reduce Crime? Estimates Using the Allocation of Police Forces After a Terrorist Attack," American Economic Review, American Economic Association, vol. 94(1), pages 115-133, March. [Downloadable!]
  18. Lance Lochner, 2003. "Individual Perceptions of the Criminal Justice System," NBER Working Papers 9474, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Patrick Bayer & Randi Hjalmarsson & David Pozen, 2007. "Building Criminal Capital behind Bars: Peer Effects in Juvenile Corrections," NBER Working Papers 12932, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Marco Gonzalez-Navarro, 2008. "Deterrence and Displacement in Auto Theft," Working Papers 1098, Princeton University, Department of Economics, Center for Economic Policy Studies.. [Downloadable!]
  21. Howard Kunreuther & Geoffrey Heal, 2002. "Interdependent Security: The Case of Identical Agents," NBER Working Papers 8871, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  22. Philip J. Cook, 2008. "Assessing Urban Crime And Its Control: An Overview," NBER Working Papers 13781, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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