ECONOMISTS HAVE ACCEPTED THE STUDY OF CRIMINAL ACTIVITIES AS BEING WITHIN THEIR AREA OF INTEREST. WHILE OTHER SOCIAL SCIENTISTS HAVE INTENSIFIED THEIR RESEARCH ON CRIME, HOWEVER, MOST ECONOMISTS LIMITED THEMSELVES TO THE FUNCTIONING OF CRIME WITHIN THE LEGITIMATE MARKET. CONTEMPORARY ECONOMISTS HYPOTHESIZE THAT CRIMINALS ARE RATIONAL, I.E., THAT CRIMINALS ARE CALCULATING INDIVIDUALS WHO ARE AFFECTED BY EXPECTED GAINS AND COSTS OF COMMITTING CRIMES. RELATED TO THIS HYPOTHESIS, THE FORMAL ECONOMIC MODEL ALSO SUGGESTS THAT THERE ARE TWO METHODS OF GENERATING INCOME. THE FIRST METHOD INCLUDES TRADITIONAL LEGAL OCCUPATIONS (BLUE-AND-WHITE-COLLAR JOBS). THE SECOND METHOD IS THE COMMITTING OF PROPERTY CRIMES (ILLEGITIMATE OCCUPATIONS). AS STATED IN THE MODEL, INDIVIDUALS CAN ALLOCATE THEIR WORKING TIME BETWEEN THE TWO COMPETING INCOME-GENERATING ACTIVITIES. IT IS RECOGNIZED BY THE MODEL THAT ILLEGITIMATE ACTS DIFFER IN TERMS OF TWO IMPORTANT DIMENSIONS: (1) NONPECUNIARY ASPECT, THE DESIRABILITY OF AN OCCUPATION; AND (2) VARIABILITY IN EARNINGS, DUE TO INHERENT PROBABILISTIC COSTS ASSOCIATED WITH POLICE APPREHENSION AND SERVING OF A SENTENCE OR PAYING OF A FINE IF CONVICTED. AN INDIVIDUAL SUPPLY OF AN OFFENSE BEHAVIORAL FUNCTION IS DERIVED FROM THE MODEL. BECAUSE OF INSUFFICIENT DATA TO TEST THE OFFENSE BEHAVIORAL FUNCTION, THE FUNCTION IS REPLACED WITH AN AGGREGATE SUPPLY FUNCTION UTILIZING MEAN COMMUNITY VALUES. IT IS SHOWN THAT CERTAIN PROXY VARIABLES ARE LIKELY TO BE RELATED IN A PREDICTABLE WAY TO THE NUMBER OF CRIMINAL OFFENSES EXPERIENCED BY A MUNICIPALITY. THE MODEL IS TESTED BY LINEAR AND LONG-LINEAR, WEIGHTED AND UNWEIGHTED, REGRESSION ANALYSIS, PARTICULARLY WITH REGARD TO SUCH ILLEGAL OCCUPATIONS AS BURGLARY, LARCENY, ROBBERY, AND AUTOMOBILE THEFT (CRIMES WITH THE POTENTIAL FOR GENERATING INCOME). THE LEVEL OF ECONOMIC ACTIVITY, AS MEASURED BY UNEMPLOYMENT RATE, PERCENTAGE OF PEOPLE LIVING IN POVERTY, AND LEVEL OF COMMUNITY WEALTH, EXHIBITS THE PREDICTED RELATIONSHIP TO THE RATE OF PROPERTY CRIME. LAW ENFORCEMENT VARIABLES HAVE DIFFERING EFFECTS, DEPENDING UPON THE SPECIFIC TYPE OF CRIME. IMPLICATIONS FOR PUBLIC POLICY REGARDING CRIME CONTROL ARE DISCUSSED, AND SUGGESTIONS FOR IMPROVING DATA SOURCES AND IDEAS FOR FURTHER RESEARCH ARE PRESENTED. SUPPORTING MATHEMATICAL EQUATIONS AND DATA ARE INCLUDED, ADDITIONAL INFORMATION ON THE ECONOMIC MODEL AND CRIME CAUSES IS APPENDED, AND A BIBLIOGRAPHY IS PROVIDED. (DEP)