Question

For an economist, is it preferable to assume that criminals are rational than to build a theory based on a rational criminal and then check the evidence? Explain your answer.

Short answer

For an economist, it could be preferable to assume that criminals are rational as it allows for the creation of coherent and predictive theories. However, any model or theory will need to be tested against real-world evidence to be validated. If empirical evidence consistently contradicts this assumption, it might be more beneficial to construct an alternative theory.

Step-by-step solution

Understanding Rational Behavior

The first concept to understand is that of rational behavior. In economic terms, an individual is considered rational if their actions are focused on achieving a specific objective, and they apply logic and reason to choose the best way to accomplish this objective.

Apply Rational Behavior to Criminals

Next, it is necessary to apply this concept of rational behavior to criminals. If criminals are rational from an economic point of view, then they would commit crimes because they perceive the benefits to outweigh the costs. They would evaluate the potential gain in comparison to the possible penalties and the likelihood of those penalties being imposed.

Building a Theory based on Rational Criminals

An economic theory could be constructed based on the assumption of rational behavior in criminals. However, the credibility of this theory would need to be tested against real-life evidence. If evidence consistently contradicted the theory, it may be necessary to revise the assumption of rational behavior.

Considering the Pros and Cons

Finally weigh the pros and cons of assuming rationality in criminals. If criminal actions appear rational and predictable according to economic theories, it will support public policies and enable us to understand and perhaps even forecast criminal behavior. However, if there is strong empirical evidence contradicting this theory, it might be more beneficial to construct an alternative theory without this assumption.

Key concepts

Economic Theory

Economic theory often involves understanding how individuals make decisions to achieve their objectives. It is grounded in the assumption that people are rational actors. This means they systematically and purposefully do the best they can to achieve their goals, given the available opportunities. This concept of rationality is central to economic theory, as it provides a framework for predicting how people will respond to different situations and incentives.
Economic theories rely heavily on constructs like utility, a measure of satisfaction or happiness one derives from the consumption of goods and services. Rational actors aim to maximize their utility, subject to constraints such as income or time. When applying this to criminal behavior, economic theory posits that criminals, like any other individuals, engage in a cost-benefit analysis to maximize their utility, even if that means breaking the law.
Incorporating rational behavior into economic theory allows for constructing models that can analyze and potentially predict complex human behaviors, including those outside the realms of legal activity. These models help economists provide insights that inform public policy and resource allocation.

Criminal Behavior

The idea of criminal behavior through the lens of economic theory suggests that individuals who engage in illegal activities do so after a deliberate decision-making process. From this perspective, a criminal is viewed as someone who weighs the potential benefits of committing a crime against the possible costs, such as getting caught and punished.
This approach assumes that criminals are rational actors, meaning they assess the situation logically. They consider factors like:

• The potential monetary or personal gains from the crime
• The likelihood of getting caught and facing punishment
• Possible legal or societal consequences

The rational choice model can help policymakers understand why individuals commit crimes and how they might deter these actions. By adjusting policies related to policing, penalties, or rehabilitation, it's possible to influence the perceived costs and benefits, thereby reducing crime.
However, not all criminal acts can be perfectly explained through rational behavior. Various factors, including psychological, social, and economic conditions, may lead to crimes that are not purely driven by rational cost-benefit analyses.

Cost-Benefit Analysis

Cost-benefit analysis is a key concept in both economic theory and understanding criminal behavior. It is a systematic approach to evaluating decisions, based on the comparison of the costs and benefits involved.
When applied to criminal behavior, cost-benefit analysis suggests that an individual deciding whether to commit a crime compares:

• The expected utility or benefit from the crime, such as financial gain or personal satisfaction
• The costs of committing the crime, including the possibility of apprehension, the severity of potential punishment, and broader social or legal repercussions

If the perceived benefits exceed the expected costs, the crime is more likely to occur. Therefore, altering either the perceived benefits or the risks and costs can affect the decision-making process.
Economic theories often seek to increase the probabilities and severity of consequences in order to deter rational actors from committing crimes. When policymakers understand the cost-benefit calculations of criminals, they can craft measures to alter these calculations and potentially reduce crime. Despite its utility, this approach must account for the unknowns and complexities of human behavior, acknowledging that not all actions are purely driven by economic rationality.