e. D (0), the cost of fighting crime / proportion of corrections i.e. C (P0) and the crimes / social costs / negative impacts on to offender i.e. BBFO. These different elements are important, because the combination of them is helping us to understand the total impact of crime and punishment on the economy.

As a result, these different factors are used in a basic formula to comprehend the effects of social phenomenon and crime on the economy. Below is the equation that is used to objectively evaluate what is occurring.

L (social / economic impact) = D (0) + C (P0) + BBFO

This formula is important, because it is providing us with a basic strategy that can be used to objectively evaluate the how crime and punishment are impacting society. Once this occurs, is when we can see the total economic impact of this on communities and the way that they are affecting everyone.

Beckers View of the Formula and the way that it relates to Crime

Becker believes that crime and punishment can have a negative impact on society. This is because there will be added costs for everyone, a loss of productivity and a reduction in the standard of living inside communities. However, once he applied the formula to different kinds of social situations, is when he determines that there are certain factors which could impact the society. The way that this is occurring is through the negative effects of punishment and convictions on the underlying levels of crime. In those communities where these elements are applied more aggressively is when there will be a change in society. This is the point that crime will vary in different areas, as the total economic impact is not as severe.

Evidence of this can be seen with Becker writing, “If carrying out the punishment were costly, as it is with probation, imprisonment, or parole, the elasticity of response of offenses with respect to a change in p would generally, in equilibrium, have to exceed its response to a change inf. This implies if entry into illegal activities can be explained by the same model of choice that economists use to explain entry into legal activities, that offenders are (at the margin) risk preferrers. Consequently, illegal activities would not pay (at the margin) in the sense that the real income received would be less than what could be received in less risky legal activities. The conclusion that crime would not pay is an optimality condition and not an implication about the efficiency of the police or courts; indeed, it holds for any level of efficiency, as long as optimal values of p and f appropriate to each level are chosen. If costs were the same, the optimal values of both p and f would be greater, the greater the damage caused by an offense. Therefore, offenses like murder and rape should be solved more frequently and punished more severely than milder offenses like auto theft and petty larceny.” (Becker 207 — 208) This is significant, because it is showing how the underlying amounts of crime will vary from one region to the next. As this is based upon, how aggressively the negative effects of punishment and convictions are enforced regarding the more severe offenses (i.e. murder / rape).

Moreover, Becker found that fines are the most effective punishment.

The reason why, is because they allow communities to conserve resources and they are providing them with some kind of economic benefit. A good example of this can be seen in the passage that says, “Fines have several advantages over other punishments: for example, they conserve resources, compensate society as well as punish offenders, and simplify the determination of optimal ps and fs. Not surprisingly, fines are the most common punishment and have grown in importance over time. Offenders who cannot pay fines have to be punished in other ways, but the optimality analysis implies that the monetary value to them of these punishments should generally be less than the fines.” (Becker 208) This is significant, because it is illustrating how fines are utilized to deal with the issues of crime. The reason why, is because they are offering cities with some kind of economic benefit. However, in those situations when this is ineffective is the point that the government should be prepared to go after those individuals through more aggressive tactics.

As a result, there are other tools that can be used to effectively deal with the more severe crime. The most notable include: vengeance, deterrence, rehabilitation and restitution. These elements are helping to give local governments greater amounts of control in dealing with a host of issues. Where, they are used to minimize any kind of social losses over the long-term by creating different avenues for compliance. “Vengeance, deterrence, safety, rehabilitation, and compensation are perhaps the most important of the many desiderata proposed throughout history. Next to these, minimizing the social loss in income may seem narrow, bland, and even quaint. Unquestionably, the income criterion can be usefully generalized in several directions, and a few have already been suggested in the essay. Yet one should not lose sight of the fact that it is more general and powerful than it may seem and actually includes more dramatic desiderata as special cases.” (Becker 208) This is important, because it is showing how vengeance, deterrence, rehabilitation and restitution can be used as alternative punishments. Over the course of time this will help to lessen the economic impact of crime on the community. This is accomplished through carefully studying and examining the effects that these factors will have on various stakeholders in a particular region.


Clearly, crime and punishment will have a negative impact on communities. This is occurring through the loss of income for offenders and the victims. At the same time, local governments will have to spend more money in going after those individuals who are involved in criminal activity. Once this takes place, is when productivity will decline with greater amounts of resources dedicated to dealing with these issues. According to Becker, there are several different approaches that are utilized in dealing with issues. The most notable include: fines, vengeance, deterrence, rehabilitation and restitution. In general fines will help to limit the overall negative impact on cities, while providing them with income. The other areas will often focus on going after crimes that are more severe with additional resources. As a result, Becker believes that fines should be utilized for most convictions. The only time that someone should be subject to more serve punishment is when they have committed violations such as murder or rape. If this kind of approach.

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