Explain the Economic Rationale for the Supply of Crime, Show the Implications of this Rationale for the Design of Crime Deterrence Policies, and Assess the Empirical Relevance of this Rationale.
             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's model showed that the number of crimes committed (Oj) is dependent on the probability of being caught and convicted per offence (pj), the expected severity of the punishment (fj) and other variables such as legal or illegal earning ability (uj).
             An increase in either pj or fj would lead to a fall in the expected utility of the criminal offence . A fundamental assumption of this model is that the individuals must be fully responsive to relevant economic incentives and decisions are rational. It then follows that this framework would not be relevant to an insane person (thus the motivation for a criminal to plea 'insanity').
             A market offence function can now be formed to demonstrate the total number of offence...