Offending Frequency and Responses to Illegal Monetary Incentives

We examine how responsive offenders are to illegal monetary incentives. draw from rational choice theory, prospect and models of labor supply develop expectations regarding the relationship between criminal efficiency, which is average earnings per offense, frequency offending. use OLS, fixed effects, first-difference estimators analyze data 152 incarcerated male inmates Quebec, Canada study within individual monthly changes in efficiency offending frequency. There an inverse offending, net for market crimes, but not property crimes. also find that crime inelastic, meaning it highly sensitive wage changes. In months have bigger pay-off crime, they offended less frequently. conjecture this negative could be explained by two mechanisms: income effect and/or through reference dependence. However, we able disentangle mechanisms. Moreover, note likely endogenous should treated as such future scholarship.