Friday 6 January 2023

Rational Danish bank robbers

Gary Becker's theory of rational crime suggests that criminals weight up the costs and benefits of crimes they commit. If the costs of crime go down, or the benefits go up, they will commit more crimes. On the other hand, if the costs of crime go up, or the benefits go down, they will commit fewer crimes. If the benefits of crime fall to zero (or below the costs of even the lowest-cost criminal), perhaps the number of crimes falls to zero? The New Zealand Herald reported earlier this week:

For the first time in years, Denmark hasn’t recorded a single bank robbery. There wouldn’t have been much point.

Cash transactions in the Nordic country have become virtually obsolete, with Danes increasingly opting to use cards and smart phones for payments...

Finance Denmark, the banking sector’s association, said only about 20 bank branches across the country have cash holdings. But then the number of bank branches has fallen from 219 in 1991 to 56 in 2021, it said.

News reports noted that cash withdrawals in Denmark have been dropping by about three-quarters every year for the past six years.

In 2000, 221 bank robberies were recorded, Finance Denmark said. In 2021, there was just one.

If there are fewer banks, holding less cash on the premises, then the benefits of committing a bank robbery are lower, and there are fewer bank robberies (in this case none at all). However, the criminals appear to be switching to close substitutes instead:

Initially, robbers switched their attentions from bank branches to Automatic Teller Machines, with such attacks peaking at 18 in 2016. But those too have come down to zero amid better surveillance and technical protection, the industry association said.

Better surveillance and technical protection raises the costs of crime, which again reduces the number of crimes (in this case, attacks against ATMs). Finally:

Finance Denmark said criminals in recent years have turned to defrauding people online.

Watch out for those online scams, people! 

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