The chapter is organized as follows. We begin by describing a standard choice-based model of crime. We then discuss how this individual-level model can be aggregated to produce crime regressions of the type found in the literature. In the next three sections we discuss the analysis of counterfactuals, issues of model uncertainty in crime regressions, and the relationship between statistical models and policy evaluation. We then apply our general arguments to areas in the empirical criminology literature: the convergence of crime rates, capital punishment, and shall-issue concealed weapons laws. The next section discusses whether the limitations that exist in using crime regressions mean that they should be replaced by quasi-experimental methods, and a final section concludes the chapter. Our discussion is conceptual; Durlauf, Navarro, and Rivers (2008) provide a more systematic treatment of many of the issues we raise as well as an empirical application.
From the vantage point of economics, the fundamental idea underlying the analysis of crime is that each criminal act constitutes a purposeful choice on the part of the criminal. In turn, this means that the development of a theory of the aggregate crime rate should be explicitly understood as deriving from the aggregation of individual decisions. The basic logic of the economic approach to crime was originally developed by Gary Becker (1968) and extended by Isaac Ehrlich (1972, 1973). This logic underlies the renaissance of crime research in economics, exemplified in the work of, for example, Levitt (1996) and Donohue and Levitt (2001).
In constructing a formal model, the idea that crime is purposeful means that an observed criminal act is understood as the outcome of a decision problem in which a criminal maximizes an expected utility function subject to whatever constraints he faces. The utility function is not a primitive assumption about behavior (i.e., no economist thinks that agents carry explicit representations of utility functions in their heads); rather, it is a mathematical representation of an individual’s preferences, one that constitutes a rank ordering across the potential actions the individual may take.
The choice-theoretic conception does not, by itself, have any implications for the process by which agents make these decisions, although certain behavioral restrictions are standard for economists. For example, to say that the commission of a crime is a purposeful act says nothing about how an individual assesses the various probabilities that are relevant to the choice, such as the conditional probability of being caught given that the crime is committed. That said, the economic analyses typically assume that an individual’s subjective beliefs—that is, the probabilities that inform his decision—are rational in the sense that they correspond to the probabili-