VI. Costs and Benefits: The Economic Mod
A case can be made that a general and accurate picture of crime can be presented with grand economic theories containing only the most apparent variables representing the market for crime. This form of theorizing holds most true to the classical tradition. Analyses of aggregate variation tend to smooth out some of the complexities and detail found in decisions; however, such analyses generally attempt to model the effects of only a few variables that might influence the rate of occurrence of crime generally. The trade-off of such a general approach is that it necessarily obscures important details and peculiar thinking that affect decisions in many offenses. This empirical– theoretical divide in rational choice/classical literature is not unique to criminology. Economists might examine how purchasers respond to price changes by graphing the number of purchases by increasing prices, and that approach obviously can provide general knowledge on the subject. However, the microconsiderations of real buyers and their idiosyncrasies are more likely to be found in interviews, captured in surveys, or seen in laboratories by observing would-be consumers. Marketers might be more intrigued by the information gained in the last approach. The analogy reveals that aggregate and bottom-up studies of decision making approach the same phenomena from different angles and levels of analysis.
These divides are revealed in debates among researchers who study crimes as economic decisions. Despite debates, diverse approaches are commensurable, and in some cases each type of analysis might incorporate variables discovered in models done in the other. As is often the case with large numbers, many idiosyncratic influences on decisions cease to exist, but both normal and exceptional psychological patterns can be discovered and modeled in aggregate data. In fact, almost all contemporary economists recognize that there is a complex psychology of markets that incorporates external variables and logics but that affects the aggregate outcome significantly. It is widely accepted that learning, ignorance, convenience, and the tendency to satisfy (as opposed to maximize) all affect choice.
Some scholars who attempt to model relevant and recurring behavioral components into macrolevel models are at the forefront of the discipline of economics. There are subfields devoted to decision making under uncertainty and prospect theory, which models heuristic shortcuts that depart systematically from principles of probability shaping choice. There have also been advances in theorizing behavioral/economic approaches to law, which attempt to improve models of rational choice by relaxing assumptions that people are only rational optimizers of self-interest and by incorporating complexities of learned strategies for decision making under uncertainty. Criminology has far to go in understanding how even the simplest intersections of psychology, decision-making considerations, and changing markets influence crime and further still before it can incorporate cultural shifts and changing preferences into traditional aggregate economic or classically inspired models.
There is an emerging consensus within the classical camp, especially among legal scholars with an interest in moral shifts, that crime rates probably reflect fluctuation in the size and tastes of a likely customer base as well as in changing estimates of incentives and sanctions by the general population (Cooter, 2000a, 2000b). Crimes with payoff that objectively is stable over time, for example, might ebb and flow in their perceptual attractiveness in part because of the public’s multifaceted response to law. This view acknowledges that, if there is a market for crime, there may be limited numbers of participants under normal historical conditions. However, many citizens will ignore completely variation in the factors intended to raise or lower net criminal benefits, for one reason or another. There is almost no reason to think that the size of the likely offender population is stable or contingent only on economic variables, and models of crime that want to increase explained variation probably should take that into account. There is less reason for assuming that individual offenders’ thinking is intractable rather than developed over time and contingent on varying ways of thinking, events, and previous outcomes.
Many of the complications of applying the rational choice perspective are due to preferences, commitments, and mental impediments that can influence choice and make crime more or less likely. Preferences, commitments, and mental impediments may be disproportionately characteristic of identifiable groups of persons that are prone to offending. Individuals or categories of people may desire things that are not apparently objective costs or rewards of a given decision for all observers. Advertisers, for example, know that they can play on consumers’ irrational preferences by cleverly and expensively packaging goods even when that packaging is thrown away immediately on purchase; marketers know that some consumers are more enticed than others and how to play to the tastes of particular groups. Preferences affect what is chosen when one is confronting criminal opportunity as much as they determine what persons choose when deciding whether to purchase or walk away from a product in a store. For example, problem gamblers have not only an increased desire for arousal that comes from the activity but also increased expectations that gambling will result in positive and arousing experiences, as has been shown in a sample of criminal offenders (Walters & Contri, 1998). Therefore, rational choice applications that fail to account for varying tastes and sensations related to crime may be neglecting important variables and limiting explanatory power. Despite the admonition that explanations of crime that focus on abnormality are superfluous by advocates of pure economics, it is likely that offenders are drawn to elements of criminal activity in a way that others are not.
Individuals or groups also may have ways of thinking that skew their analysis of costs and benefits, apart from utilities. It is now widely accepted that there are thinking mistakes associated with addiction, for example. These mistakes include a willingness to act without full information, mistaken retention of practiced behaviors in simple tasks, and the discounting of future consequences. If one looks to gamblers, and experiments that emulate gambling, one can see that a great many people are overoptimistic about their ability to calculate outcomes, consider sunk costs errantly, are too loss averse to play rationally, see only the most available options, and misinterpret near-misses as near-wins instead of as losses. Indeed, the earliest statements of classical criminology recognized that the severity of punishment generally is discounted according to the amount of time (celerity) until it will be imposed, implying that the discount might be greater for some than others. There is a long and continuing history of examining whether offenders discount future costs more than nonoffenders and of extrapolating the implications for law (Listokin, 2002, 2007). Discounting potential negative consequences at greater rates than others may be one manifestation of impulsivity, a construct increasingly integrated into individual-level analyses of crime. Many of these analyses are inspired by and designed to improve on earlier versions of rational choice and classical criminology.