Are criminals rational? In his groundbreaking work of 1968, Gary Becker argued that they are. The American economist, who would go on to win the Nobel prize in economics in 1992, theorised that individuals engage in crime only if the returns are greater than the returns from engaging in legal activities, after you factor in the risk of being caught.
This has been largely supported by empirical evidence. But one aspect of Becker’s model which has proven difficult to confirm is whether criminal activity is sensitive to changes in the financial returns from crime. This is mostly because those returns are themselves affected by criminal activity.
