In an article for Significance Magazine, economists Barry Reilly, Neil Rickman and Robert Witt explain why robbing banks stinks as a profession.
The return on an average bank robbery is, frankly, rubbish. It is not unimaginable wealth. It is a very modest £12 706.60 per person per raid. Indeed, it is so low that it is not worth the banks’ while to spend as little as £4500 per cashier position at every branch on rising screens to deter them.
A single bank raid, even a successful one, is not going to keep our would-be robber in a life of luxury. It is not going to keep him long in a life of any kind. Given that the average UK wage for those in full-time employment is around £26 000, it will give him a modest lifestyle for no more than 6 months. If he decides to make a career of it, and robs two banks a year to make a sub-average income, his chances of eventually getting caught will increase: at 0.8 probability per raid, after three raids or a year and a half his odds of remaining at large are 0.8×0.8×0.8=0.512; after four raids he is more likely than not to be inside. As a profitable occupation, bank robbery leaves a lot to be desired.
Be sure to read the full article for more details on the varying gains and losses when the team is bigger and whether or not a gun is used. Spoiler: an additional member to the robbing team raises the expected haul by about £9,000, and the use of a firearm raises the expected output by about £10,000. Just don’t get arrested.
[via Ars Technica]
Did I miss something? According to the excerpt the probability of getting caught decreases with every heist.
@Craig — The calculation is the probability of “remaining at large,” which decreases with each robbery, so the probability of getting caught increases.
“The probability of getting caught, 1 – q, is 20%, which means that q is 80% or 0.8”
“an additional member to the robbing team raises the expected haul by about £9,000″… might wanna be a little careful with the wording here. common sense suggests the crew is larger because the heist is bigger… not the other way around.
So… because banks are too greedy and are leaving it easy for any moron to give it a try (and finally get caught), WE (the society) will be paying for the “temptation” the bank is offering by putting them in jail and keeping an eye on them.
In other words, we are paying for the banks – again.
A much higher probability to make an extraordinary living in robbing a bank is to own one or be an executive at one. You can then rob the deposits of people and get government assistance to do it.