Because that is where the gold is

Bank robber Willie Sutton stole an estimated $2 million during his forty-year “career”. This is all the more astonishing since he spent roughly half of that time in prison and escaped three times. He is credited with being asked, “Why do you rob banks?” and answering, “Because that is where the money is.” Except he never said that, but that is beside the point.

What is important is that this apocryphal quote gave rise to Sutton’s Law, which states that when you look for reasons why somebody does something, the most common reason is likely true. Medicine students are taught to use Sutton’s Law to diagnose patients because despite what medical dramas like House M.D. tell you, if a patient shows up with joint pain, a fever and chest pain, it is most likely not lupus but a simple cold.

Now put yourself into the shoes of a burglar. You may be no Willie Sutton, but you are rational enough to not rob any house blindly but instead think about which houses to break into. Clearly, the houses of the rich are more promising because they likely have lots of valuables at home. The trouble just is that rich people also have the money for alarm systems and guards, so the risk is pretty high.

Better to target houses that are less protected but may still have valuables at home. And there is one group of people that is kind of famous for hoarding a certain kind of valuable at home despite not being too rich: South Asians.

Gold as a store of value plays an enormously important role in Indian, Bangladeshi, and Pakistani communities. So why not rob the houses of these people? The unfortunate answer of a paper by Nils Braakmann and his colleagues is that burglars are rational and tend to break into houses in South Asian communities more frequently than in other houses. The frequency of burglaries increases whenever the gold price increases because then, the profit for the burglars increases as well. To paraphrase Willie Sutton: “Why do people break into homes of South Asians? Because that is where the gold is.”

Increase in burglaries in South-Asian communities when gold price rises

Source: Braakmann et al. (2022)