Recently, quite a lot of work has been done on deducing parameters from observed decisions using dynamic programming models, and Wolpin (1996) provides a good introduction to this literature. While a dynamic programming framework to this problem has not been utilised in this paper, the concept of bringing together actual decisions and a constructed model to explain these to infer an unobservable parameter is the same. For more discussion of the dynamic programming methodology and related issues, the reader is referred to Wolpin’s paper. Our alternative framework is to undertake a calibration exercise based on defendants’ optimal plea decisions for three different offences. For representative ex ante combinations of plausible parameter values for the cost of a guilty plea and expected cost of a trial we generate a very large sample of values of the discount rate at which a defendant would be indifferent between either plea. The median r value of our distributions is interpreted as the defendant’s willingness to pay to delay the cost or expected cost of imprisonment, and hence a measure of the disutility of imprisonment. Alternatively, our estimates can be interpreted as implicit premiums over and above the unskilled wage rate.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number
2008_09.
Find related papers by JEL classification: K0 - Law and Economics - - General
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: