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Partially pursued. Tb ishment by optimal criminal law would First and forem become the same: n ment of the "harm" would become a bral the public would coIl would be defined fun the inability of a per Since D' = H' — C', by substitution one has Thus an action woulc (2') pensated "harm" to while tort law would As a practical e and since equilibrium requires that C' =f, 1= H' + C' + bf(l (3') wrought, consider th classic demonstratior and reduce econom; or H'+C' I — b(I — 11€,) , (4') If b > 0, €, < I (see Sec.
3' An interesting application of these conclusions is to different kinds of offenses. Although there are few objective measures of the damages done by most offenses, it does not take much imagination to conclude that offenses like murder or rape generally do more damage than petty larceny or auto theft. If the other components of the loss in income were t' increases monotonically from a low of zero when p = I to an infinitely high value when p = ci. If the loss function equaled the optimality conditions would become D'+C'=_bpf(l and nineteenth cenre then, even though the serious criminal offenses.
12 CRIME AND PUNISHMENT: AN ECONOMIC APPROACH the market offense function as 0 = O(p,f, u). (14) This function is assumed to have the same kinds of properties as the individual functions, in particular, to be negatively related to p and f and to be more responsive to the former than the latter if, and only if, offenders on balance have risk preference. Smigel (1965) and Ehrlich (1967) estimate functions like (14) for seven felonies reported by the Federal Bureau of Investigation using state data as the basic unit of observation.