An explanation of supply and demand provides the basis for a discussion of the economic theory of criminal behavior, which assumes that people do what they can to maximize personal satisfaction. This view is contrasted with physiological, psychological, and sociological theories of the causes of crime. The economic approach predicts that punishment has a deterrent effect, that crime is profitable, and that economic conditions are a principal determinant of crime levels. Separate chapters discuss the impact of deterrence on homicides, the profitability of property crimes, and research on relations between economic conditions and crime. The book also explores alternative forms of punishment, such as fines, restitution, and victim compensation. Analyses of the costs of crime focus on determining the optimal level of resources to be devoted to law enforcement and methods of allocating resources within the criminal justice system. The chapter on organized crime as a cartel discusses the potential benefits derived from organizing criminal activity versus the costs of forming and maintaining an organization. Crime that results from prohibiting the exchange of goods and services that people want is analyzed in terms of the sale of heroin. An economic assessment of the judicial system addresses plea bargaining, rationing time available for trials, and the costs of juries. Graphs, tables, footnotes, an index, and an appendix on econometrics are included.