This paper aims to develop a utility maximising framework for criminal behaviour and to consider a Markowitz‐type utility function, centred at current wealth, for a representative criminal.
The paper takes the form of a conceptual discussion.
The Kahneman‐Tversky value function form seems to be consistent with the current empirical evidence, expressed mainly as the ratio of certain elasticities. The criminal's optimal level of crime is obtained and comparative statics derived to help suggest how crime might be controlled.
Empirical work is encouraged to elicit the utility function of a representative criminal in this analytical framework, to ascertain if crime is a favourable bet and if it could indeed be Giffen.
The solution shown in the paper involves an upper limit on the odds against detection of the criminal and it is shown that a distinct possibility is that crime is a Giffen commodity.
