Sunday, 7 July 2019

Rational avocado thefts are on the rise

Last month the New Zealand Herald reported:
Tauranga growers Liz Pratt and Neville Cooper have caught the latest thieves on film after two separate night break-ins on June 8 and June 12.
Cooper said the sole thief caught on film on June 8 stole avocados worth about $1250...
The couple believes the thieves are selling the fruit on the black market to sushi shops, where the fruit is used immediately and can't be traced...
Police said provisional figures recorded 130 avocado thefts in the six months to last December, up from 110 on the same period of 2017.
There were 210 reported thefts in the full year to December, mainly in the Bay of Plenty, Northland and Eastern districts...
Police Senior Sergeant Alasdair Macmillan said police "have seen a rise in reporting these types of thefts in recent months".
"Avocados are a target for thieves due to availability and price," he said.
This relates to previous posts of mine on honey thefts and onion thefts. At the risk of repeating myself, Gary Becker (the 1992 Nobel Prize winner) identified that rational criminals would weigh up the benefits and costs of their actions, in his economic theory of crime (see the first chapter in this pdf).

A similar way of thinking about it is represented in the diagram below, where Q is the quantity of avocado thefts. Marginal benefit (MB) is the additional benefit of engaging in one more avocado theft. In the diagram, the marginal benefit of avocado thefts is downward sloping - the more avocado thefts a criminal engages in, the less they can sell their stolen avocado for (because it is harder to 'fence' greater quantities of stolen avocados - there are only so many sushi shops that will accept stolen avocados). Marginal cost (MC) is the additional cost of engaging in one more avocado theft. The marginal cost of avocado theft is upward sloping - the more avocado thefts a criminal engages in, the higher the opportunity costs (they have to give up more valuable alternative activities they could be engaging in, and as well, they are more likely to get caught and it becomes harder to 'fence' their stolen avocado). The 'optimal quantity' of avocado thefts (from the perspective of the thief!) occurs where MB meets MC, at Q* avocado thefts. If the criminal engages in more than Q* thefts (e.g. at Q2), then the extra benefit (MB) is less than the extra cost (MC), making them worse off. If the criminal engages in fewer than Q* thefts (e.g. at Q1), then the extra benefit (MB) is more than the extra cost (MC), so conducting one more theft would make them better off.

Now consider what happens in this model when the value of avocados increases. The benefits of avocado crime increase. As shown in the diagram below, this shifts the MB curve to the right (from MB0 to MB1), and increase the optimal quantity of avocado thefts by criminals from Q0 to Q1. Avocado thefts increase.

It is incentives that lead to an increase in avocado theft, and avocado theft can also be reduced by changing the incentives. The New Zealand Herald article gives some suggestions:
Pratt and Cooper had four thefts last year, prompting them to spend about $2500 on security cameras and $1700 on electric fences along all their road frontages.
"Up to then we hadn't had any trouble at all," Cooper said.
"Other growers have had similar experiences. I was just talking to one the other day, he's just bought 10 of them [cameras] to put around his orchard. He's had a lot of break-ins."
He said he had heard that at least one sushi shop owner had been prosecuted for receiving stolen avocados. But that didn't seem to have stopped the practice...
[Police recommended that] "Orchardists can help prevent thefts by taking action to secure their properties and crops. Measures include installing boundary fences, and CCTV and hidden cameras to catch offenders.
"Such measures can be highly effective, and the information captured through CCTV can be extremely helpful as the more information residents can pass on to police, the more likely it is that we can make an arrest."
Installing CCTV and security fences increase the marginal cost of engaging in avocado theft, shifting the MC curve up and to the left. The optimal quantity of avocado theft will reduce. Prosecuting sushi shop owners who receive stolen avocados will make shop owners less willing to receive stolen avocados, reducing the marginal benefit of avocado theft. This shifts the marginal benefit curve down and to the left, and decreases the optimal quantity of avocado theft.

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