The economic rationale for the supply of crime will initially be analysed using Becker's framework. The implications of his findings will then be used as a means of explaining how crime deterrence policies can be devised. The same procedure will then be undertaken for Ehrlich's model, with an assessment of the application of the model in addition to its empirical relevance. There will be a discussion on the merits of both of these frameworks using other papers by other economists.

Gary Becker applied the principles of expected utility theory to explain the individual's decision to commit a crime. This decision to commit an offence is made rationally and is dependent on incentives. This model views crime as an economic activity that has rational, utility-maximising participants who only choose to commit an offence if the expected utility is higher than the utility from a legal activity.

The number of times that an individual commits a crime can be represented by the following function:

Becker concluded that anybody willing to commit a crime must have a 'risk-loving' attitude because 'crime doesn't pay' (between a certain range of p and f). Thus policies need to be implemented that reduce the expected utility of the individual either through an increase in the probability of detection or through the loss if caught and convicted (in order to minimise the social loss). Appendix 1 shows us that for a risk-averse individual at the optimum point, the expected utility of the crime does not exceed the utility of the initial wealth. Becker also observed that the number of offences is more responsive to the probability of being caught rather than the level of punishment.

Some common words found in the essay are:
Gary Becker, Looking Appendix, WLT- FcT-, Passel Taylor, Carr-Hill Stern, Michael Howard, Relevance Rationale, Unlike Becker's, WLT- Wo, supply crime, expected utility, Investigation' Grogger, marginal cost, becker's model, illegal activities, murder rate, wc + wlt-, probability detection, level punishment, utility function, + wlt-, + wc +, expected utility function, = wo +, fall supply crime,
Approximate Word count = 2488
Approximate Pages = 10 (250 words per page double spaced)