Berkeley Program in Law and Economics
Crime and Punishment with Habit Formation
- Author(s): Kuhl Teles, Vladimir
- Andrade, Joaquim Pinto
- et al.
Moral concepts affect crime supply. This idea is modelled assuming that illegal activities is habit forming. We introduce habits in a intertemporal general equilibrium framework to illegal activities and compare its outcomes with a model without habit formation. The findings are that habit (i) reduces the crime level; (ii) reduces the marginal effect of illegal activities return on crime; (iii) reduces the efficacy of punishment