An Economic Approach to Motor Vehicle Theft

An Economic Approach to Motor Vehicle Theft

Carlos A. Carcach
Documentos de Trabajo del CPP No. 001/2011
Julio 2011


Motor vehicle theft costs dearly to the Australian economy. Conservative estimates have put the annual cost of this form of illegal activity at 654 million during 1996. A number of initiatives aimed at reducing the incidence and cost of car theft have been implemented in recent years, yet statistics indicate that car theft is on the increase. Several authors have proposed an integrated approach to the regulation of markets for stolen property. Understanding property crime as a market is central to identifying approaches to its control.

This paper discusses an industry model of crime and develops it on Australian data. Our model is an adaptation of one originally proposed by Vandeale (1978). It considers a production sector that uses inputs from a market of illegal labour to generate a supply of illegal goods that are traded in a product market. These sectors interact with each other and with a criminal justice sector. The model is applied to the analysis of car theft in Queensland.

JEL Classification: K40, K42 Keywords: Illegal Behavior, Illegal Markets, Rent Seeking

Carlos Carcach
Centro de Políticas Públicas
Escuela Superior de Economía y Negocios
Km 12 ½ Carretera al Puerto de La Libertad, Calle Nueva a Comasagua
Santa Tecla, El Salvador
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