Punishment cost is the difference between what the criminal pays and what the enforcement system receives.  It may be stated as follows: Suppose criminals are risk neutral, so that all that matters to them is pf, the expected value of the punishment.  Consider the choice of punishments available to the court system for different values of f, the equivalent fine for a criminal background search.  The economics of Efficient Punishment A legal system may be evaluated in a variety of ways by economists, legal scholars, or moral philosophers.  In a society with no restrictions at all, rape murder and theft would be the norm, but as we have a system of punishments, sanctioned by society, these animalistic tendencies are minimised or even deterred.