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Does a Rise in Maximal Fines Increase or Decrease the Optimal Level of Deterrence?

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  • Tabbach Avraham D

    (Tel-Aviv University)

Abstract

The economic literature on crime and law enforcement shows that the optimal level of deterrence increases when maximal fines rise. This paper shows that this view may be incorrect. In particular, if the gains from crime can be disgorged, as is usually the case in reality, then increasing the maximal fine may reduce the optimal level of deterrence. This may happen if offenders' wealth is less than the monetary value of the harm that offenders cause.

Suggested Citation

  • Tabbach Avraham D, 2009. "Does a Rise in Maximal Fines Increase or Decrease the Optimal Level of Deterrence?," Review of Law & Economics, De Gruyter, vol. 5(1), pages 53-73, March.
    • Handle: RePEc:bpj:rlecon:v:5:y:2009:i:1:n:3
    DOI: 10.2202/1555-5879.1245
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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. Bone, John, 1985. "On substituting a socially costless penalty for costly crime," International Review of Law and Economics, Elsevier, vol. 5(2), pages 239-246, December.
    3. Bowles, Roger & Faure, Michael & Garoupa, Nuno, 2000. "Economic analysis of the removal of illegal gains," International Review of Law and Economics, Elsevier, vol. 20(4), pages 537-549, December.
    4. John Henderson & John Palmer, 2002. "Does More Deterrence Require More Punishment? [or Should the Punishment Fit the Crime?]," European Journal of Law and Economics, Springer, vol. 13(2), pages 143-156, March.
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    3. Cain Michael, 2016. "An Economic Assessment of Criminal Behaviour," Review of Law & Economics, De Gruyter, vol. 12(1), pages 77-94, March.

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