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Time, Money, And Optimal Criminal Penalties

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  • Sandy Baum
  • Linda Kamas

Abstract

The economic approach to optimal criminal penalties measures the welfare effects of crime and punishment in dollar terms, ignoring differences in the marginal utility of money among people. This paper alternatively proposes using time as the unit of measure in determining optimal criminal penalties, measuring the costs and benefits of crime in hours or days instead of dollars. The policy implications differ substantially from those in the existing economic literature. Equal prison terms impose similar time costs on all individuals rather than being more costly for those with higher foregone earnings. Equal fines impose the same cost on all individuals in the dollar‐based economic models but in a time‐denominated system are costlier to those who require more time to earn the money to pay the fines. In principle, one can use either money or time in setting penalties. However, time‐based penalties are more consistent with the fundamental and widely held principles of justice on which the U.S. legal system rests.

Suggested Citation

  • Sandy Baum & Linda Kamas, 1995. "Time, Money, And Optimal Criminal Penalties," Contemporary Economic Policy, Western Economic Association International, vol. 13(4), pages 72-79, October.
    • Handle: RePEc:bla:coecpo:v:13:y:1995:i:4:p:72-79
    DOI: 10.1111/j.1465-7287.1995.tb00733.x
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    References listed on IDEAS

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    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    2. Lott, John R, Jr, 1992. "An Attempt at Measuring the Total Monetary Penalty from Drug Convictions: The Importance of an Individual's Reputation," The Journal of Legal Studies, University of Chicago Press, vol. 21(1), pages 159-187, January.
    3. Lott, John R, Jr, 1992. "Do We Punish High Income Criminals Too Heavily?," Economic Inquiry, Western Economic Association International, vol. 30(4), pages 583-608, October.
    4. Lott, John R, Jr, 1987. "Should the Wealthy Be Able to "Buy Justice"?," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1307-1316, December.
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