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Crime and Punishment with Habit Formation

  • Author(s): Kuhl Teles, Vladimir
  • Andrade, Joaquim Pinto
  • et al.
Abstract

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

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