Most Stolen Cars

Beyond the graphs and equations, economics is essentially a study of incentives. The CNN article lists the top ten vehicles stolen during 2004. The most striking fact about the top ten list is that only one moderately new vehicle, the 2003 Dodge Ram pick-up, made the list. Nine out of ten of the cars are models older than 1997.

The economist in you should ask, "If a thief is going to risk going to jail for stealing a car, why is he more likely to steal a 1995 Honda Civic rather than a 2005 BMW 3 Series?"

The article lists two primary reasons that raise the chances of a vehicle getting stolen: popularity and longevity. The popularity argument says that if a lot of people drive Honda Civics, then there are more of them to steal. The longevity argument says that if people who drive Honda Civics tend to drive them for a long time, then there is a demand for replacement parts.

So it appears that stealing a 1995 Honda Civic is more profitable than a 2005 BMW 3 Series because there is greater demand for replacement parts for an old Civic than a new BMW. Can you think of another reason why old cars are stolen more often than new cars?

An owner of a 1995 Honda Civic is less likely to buy expensive anti-theft equipment for the car because he can't afford it or he doesn't believe it's worth it given the price of an old Civic. An owner of a 2005 BMW 3 Series is more likely to buy expensive anti-theft equipment for the car because he can afford it or he believes it's worth protecting his "valuable" investment.

So from a thief's perspective, stealing a 1995 Honda Civic is more convenient (lots of them around), profitable (high demand for parts), and easy (old and low priced cars do not usually have sophisticated anti-theft systems).

Here is some food for thought:

1. Assume a buyer has perfect information about how likely old Honda Civics get stolen. Does this increase or decrease the demand for NEW models like the 2006 Honda Civic?

2. If you believe that the probability of your new car getting stolen increases as it gets older, do you have more or less of an incentive to sell it after a few years of owning the car?

3. The list of most-stolen vehicles lists 4 pick-up trucks. Are the incentives for stealing a pick-up truck the same as the incentives for stealing a sedan or coupe? For example, what explains the fact that the 1994 Dodge Caravan (low MSRP) gets stolen more often than a 1990 Acura Integra (high MSRP)?

Keywords: Risk and reward, Incentives