Ian Ayres and Steven Levitt looked at the impact of Lojack – a hidden radio-transmitter device used for retrieving stolen vehicles.
There is no external indication that Lojack has been installed, so it does not directly affect the likelihood that a protected car will be stolen.
Ian Ayres and Steven Levitt attempted to measure its general deterrence effect: they found that the availability of Lojack is associated with a sharp fall in auto theft. Rates of other crime do not change appreciably. There was also a small but observable tendency for older-model cars to be stolen. presumably because these were somewhat less likely to have a Lojack transmitter.
The marginal social benefit of an additional unit of Lojack has been fifteen times greater than the marginal social cost in high crime areas. Those who install Lojack obtain less than 10 percent of the total social benefits, leading to under-provision by the market.
Utopia, you are standing in it! 
Recent Comments