Do Economies of Scale Help Crime?

I was recently walking down the street when I discovered a cell phone store named Cricket that provides incoming customers with plans that provide adequate coverage with no credit checks or start up fees. The store I passed was located in a traditionally poor neighborhood that was slowly in the process of being gentrified.

It was at that point that I realized that I had seen a majority of their stores where located in poorer neighborhoods. This brought me to believe (and its simply conjecture) that this cell phone provider gears its product to low income individuals. Since the cell phone market is already saturated cricket can sell its products at a very low price and capture a large share of their targeted market.

At first glance this seems to be a win-win situation, you are providing low income consumers with a product that is vital to the progress of their lives (e.g the social networking externalities produced by having a cell phone tend to increase your chances of finding higher paying jobs) without the hassle of going through credit checks that they may not pass. The flip side of this is that these products are easily accessible to criminals who try to keep a low profile. It is well known that there is a strong positive correlation between crime and poverty (i.e more criminals are located in low-income neighborhoods) which leads to you to believe that Cricket is inadvertently selling its products to criminals.

This is in no way saying that Cricket is condoning criminal behavior, but they may inadvertently helping them gain access to a product that aids in conducting business in the underground economy. Cell phones in the hands of a criminals allows them to form a vast network to communicate on making the enterprise more efficient. The gains in efficiency translate into higher profits via lower operating costs.

Does this mean Cricket should require tougher standards? No because they will only be harming themselves (through lower clientele) and low income citizens who do not choose to be criminals. Needless to say its very interesting to speculate on the positive and negative externalities associated with technological innovation and economies of scale.