(Received 31 December 1998; accepted 14 August 2000)
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The Supreme Court of California has ruled on several cases involving the question of to what extent a possessor of land is liable for the harm to customers or tenants occurring when a third party commits a criminal act against the customers or tenants present on the land. This paper reviews the historical development of this aspect of negligence law and analyzes the ethical and economic efficiency implications of ascribing legal responsibility for such crimes to: a) local government, b) the possessor of land, c) the customer, and d) the criminal. For example, is there an effort by the judicial system to substitute deterrence from criminal acts provided by possessors of land (i.e., specific deterrence) for the general deterrence traditionally provided through the use of police powers by local government? Analysis indicates that specific deterrence may be more effective in changing the location of criminal acts than in reducing the level of criminal activities. Also, the expense of complying with the legal responsibilities of protecting customers and clients may be especially high in high-crime, low-income areas, thus forcing commercial establishments to move or go out of business.
Thus, we have a troubling tradeoff: compensating individual crime victims in a high-crime area could ultimately deprive the residents of basic economic opportunities.
Professor of economics, Economics Department, Fairleigh Dickinson University, Madison, NJ
Regional economist, U.S. Army Corps of Engineers, New York, NY
Associate professor of economics and finance, St. John's University, Staten Island, NY
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