The economics of shoplifting

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1973

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Virginia Polytechnic Institute and State University

Abstract

The controversy revolving around the motivation of criminals was mediated. "Irrationality" was discussed within the context of imperfect information on the part of decision-makers--an irrational action being defined as one for which expected benefits from the action exceed expected costs, but for which the actual costs exceed the actual benefits. Within this context, the number of criminal offenses was said to be a function of four variables: (1) the probability of apprehension; (2) the punishment per offense; (3) a portmanteau variable representing such things as alternative income sources and moral turpitude; and (4) the level of "knowledge" or perception which the potential criminal possesses about the first three of these variables.

Using this model, the crime of shoplifting was examined first from the point of view of the retail merchant and then from the viewpoint of the potential shoplifter. It was shown that, because of his profit-maximizing nature, the retailer neither should nor does attempt to alter the first three variables included in the offense function--those variables relating to an actual "state of the world"--but that the merchant does attempt to affect the fourth variable, the thief's perception of the actual state of the world.

The analysis of the actual costs and benefits of shoplifting revealed that, under certain restrictive assumptions, the net benefits of shoplifting were positive for a sample population of shoplifters.

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