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Regulating harmless activity to fight crime

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  • Florian Baumann
  • Tim Friehe

Abstract

This paper establishes that regulating harmless activity can be an effective instrument of law enforcement when the harmless activity and the harmful activity are interdependent. This type of regulation is not without cost, as it distorts the individual choices made by both law-abiding and non-law-abiding individuals. However, it can be socially advantageous when the impact on welfare resulting from changes in the choices of offenders dominates the impact of changes in non-offenders’ decisions; in addition, increasing deterrence by other means (such as raising the probability of detection or the magnitude of sanctions) can incur much higher costs. Copyright Springer-Verlag Wien 2014

Suggested Citation

  • Florian Baumann & Tim Friehe, 2014. "Regulating harmless activity to fight crime," Journal of Economics, Springer, vol. 113(1), pages 79-95, September.
    • Handle: RePEc:kap:jeczfn:v:113:y:2014:i:1:p:79-95
    DOI: 10.1007/s00712-013-0359-z
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    More about this item

    Keywords

    Optimal law enforcement; Legal activity; Substitutes; Complements; K42; H23;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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