Individual Precautions to Prevent Theft: Private versus Socially Optimal Behavior

Individuals act in a variety of ways to protect their property against theft:’ they lock their doors, purchase alarm systems, hire guards, and so forth. The things that individuals do on their own to reduce theft are of substantial importance. It is notable that private expenditures on security from crime exceed public expenditures.2 The object of the present paper is to examine the motive of individuals-acting alone or collectively-to protect their property from theft, and the social motive (to be defined) for individuals to protect their property from theft. To that end, a model is studied in which the only way that property can be protected is by private exercise of precautions; there is no public enforcement of law. A distinction of importance in the model concerns the ability of a thief to ascertain the nature of an individual’s precautions3 before the thief attempts theft. An observuble precaution is typified by iron bars on the windows of a housethese will be visible to a thief contemplating entry-whereas an unobservable precuution is illustrated by a household’s use of a safe for storing valuablesa thief may be unable to tell whether there is a safe inside a house before he enters it.4