1. Economic Analysis of Criminal Law

2. Economics
Economics is a discipline seemingly concerned with market-based transactions in which parties act purposefully to realize the benefits of exchange.

3. Criminal Acts
In contrast, many criminal acts, are inherently non-consensual, even coercive. Moreover, many crimes appear to be acts of impulse or emotion rather than the kind of rational decision making associated with market behavior.

4. The Relations
an emphasis on the role of incentives in determining the behavior of individuals, whether they are criminals, victims, or those responsible for enforcing the law;
the use of econometric approaches that seek to differentiate correlation from causality in nonexperimental settings;
a focus on broad, public policy implications rather than evaluation of specific, small-scale interventions; and
the use of cost-benefit analysis as the metric for evaluating public policies

5. Pareto Efficiency
“no one can be made better off without making at least one individual worse off”

6. Kaldor Hicks Efficiency
“outcome is considered more efficient if a Pareto optimal outcome can be reached by arranging sufficient compensation from those that are made better off to those that are made worse off so that all would end up no worse off than before”

7. Conventional Crimes
Murder
Cheating
Prostitute
Stealing
Drunk

8. Dominasi Laissez Faire
"discrimination" against certain minorities,
collusive business arrangements,
"jaywalking," travel,
the materials used in construction,
and thousands of other activities.

9. Cost of Crime Tipe of Crimes Cost (Millions of Dollar)
Crimes against persons
Crimes against property
Illegal goods and services
Some other crimes
Total
Public expenditures on police, prosecution, and courts
Corrections
Some private costs of combating crime
Overall total
815
3,932
8,075
2,036
14,858
3,178
1,034
1,910
20,980
Source.—President's Commission on Law Enforcement and Administration of Justice (1967d, p. 44).

10. Why Some persons become criminals?
Not Merely Basic Motivation, but also..?
Rational Choice Theory
Cost-Benefit Analysis

11. Punishment
“… death, torture, branding, fines, imprisonment, banishment, restrictions on movement and occupation, and loss of citizenship are just the more common ones.”
“less serious offenses are punished primarily by fines, supplemented occasionally by probation, petty restrictions like temporary suspension of one's driver's license, and imprisonment”
“The more serious offenses are punished by a combination of probation, imprisonment, parole, fines, and various restrictions on choice of occupation”

12. Cost of Punishment
Punishments affect not only offenders but also other members of society
Most punishments, however, hurt other members as well as offenders: for example, imprisonment requires expenditures on guards, supervisory personnel, buildings, food, etc
The total social cost of punishments is the cost to offenders plus the cost or minus the gain to others

13. Fines WELFARE THEOREMS TRANSFERABLE PRICING
“… is the most common kind today, the other is not unimportant, especially in underdeveloped and Communist countries.”
… probation and institutionalization use up social resources, and fines do not, since the latter are basically just transfer payments, while the former use resources in the form of guards, supervisory personnel, probation officers, and the offenders' own time.

14. Fines
Fines provide compensation to victims, and optimal fines at the margin fully compensate victims and restore the status quo ante, so that they are no worse off than if offenses were not committed. Not only do other punishments fail to compensate, but they also require "victims" to spend additional resources in carrying out the punishment. It is not surprising, therefore, that the anger and fear felt toward ex-convicts who in fact have not "paid their debt to society" have resulted in additional punishments, including legal restrictions on their political and economic opportunities and informal restrictions on their social acceptance. Moreover, the absence of compensation encourages efforts to change and otherwise "rehabilitate" offenders through psychiatric counseling, therapy, and other programs. Since fines do compensate and do not create much additional cost, anger toward and fear of appropriately fined persons do not easily develop. As a result, additional punishments are not usually levied against "ex-finees," nor are strong efforts made to "rehabilitate“ them.

15. Fines
“One argument made against fines is that they are immoral because, in effect, they permit offenses to be bought for a price in the same way that bread or other goods are bought for a price. A fine can be considered the price of an offense, but so too can any other form of punishment; for example, the "price" of stealing a car might be six months in jail. The only difference is in the units of measurement: fines are prices measured in monetary units, imprisonments are prices measured in time units, etc. If anything, monetary units are to be preferred here as they are generally preferred in pricing and accounting.”

16. PRIVATE EXPENDITURES AGAINST CRIME
“A variety of private as well as public actions also attempt to reduce the number and incidence of crimes: guards, doormen, and accountants are employed, locks and alarms installed, insurance coverage extended, parks and neighborhoods avoided, taxis used in place of walking or subways, and so on.”