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How Much Crime Reduction Does the Marginal Prisoner Buy?

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  • Rucker Johnson
  • Steven Raphael

Abstract

We estimate the effect of changes in incarceration rates on changes in crime rates using state-level panel data. We develop an instrument for future changes in incarceration rates based on the theoretically predicted dynamic adjustment path of the aggregate incarceration rate in response to a shock to prison entrance or exit transition probabilities. Given that incarceration rates adjust to permanent changes in behavior with a dynamic lag, one can identify variation in incarceration rates that is not contaminated by contemporary changes in criminal behavior. For the period 1978-2004, we find crime-prison elasticities that are considerably larger than those implied by ordinary least squares estimates. We also present results for two subperiods: 1978-90 and 1991-2004. Our instrumental variables estimates for the earlier period suggest relatively large crime-prison effects. For the later time period, however, the effects of changes in incarceration rates on crime rates are much smaller.

Suggested Citation

  • Rucker Johnson & Steven Raphael, 2012. "How Much Crime Reduction Does the Marginal Prisoner Buy?," Journal of Law and Economics, University of Chicago Press, vol. 55(2), pages 275-310.
  • Handle: RePEc:ucp:jlawec:doi:10.1086/664073
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    References listed on IDEAS

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    1. Francesco Drago & Roberto Galbiati & Pietro Vertova, 2009. "The Deterrent Effects of Prison: Evidence from a Natural Experiment," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 257-280, April.
    2. Donohue, John J, III & Siegelman, Peter, 1998. "Allocating Resources among Prisons and Social Programs in the Battle against Crime," The Journal of Legal Studies, University of Chicago Press, vol. 27(1), pages 1-43, January.
    3. Kessler, Daniel P & Levitt, Steven D, 1999. "Using Sentence Enhancements to Distinguish between Deterrence and Incapacitation," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 343-363, April.
    4. Steven D. Levitt, 1996. "The Effect of Prison Population Size on Crime Rates: Evidence from Prison Overcrowding Litigation," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 319-351.
    5. Emily G. Owens, 2009. "More Time, Less Crime? Estimating the Incapacitative Effect of Sentence Enhancements," Journal of Law and Economics, University of Chicago Press, vol. 52(3), pages 551-579, August.
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    Cited by:

    1. repec:esx:essedp:737 is not listed on IDEAS
    2. Kristin Turney & Christopher Wildeman, 2012. "Countervailing Consequences of Paternal Incarceration for Parenting Quality," Working Papers 1377, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
    3. Mueller-Smith, Michael & Schnepel, Kevin T., 2016. "Avoiding Convictions: Regression Discontinuity Evidence on Court Deferrals for First-Time Drug Offenders," IZA Discussion Papers 10409, Institute for the Study of Labor (IZA).
    4. Mauro Costantini & Iris Meco & Antonio Paradiso, 2016. "Common trends in the US state-level crime.What do panel data say?," Working Papers 2016:14, Department of Economics, University of Venice "Ca' Foscari".
    5. Maurice J.G. Bun & Vasilis Sarafidis & Richard Kelaher, 2016. "Crime, Deterrence and Punishment Revisited," UvA-Econometrics Working Papers 16-02, Universiteit van Amsterdam, Dept. of Econometrics.
    6. Steven Raphael, 2014. "The New Scarlet Letter? Negotiating the U.S. Labor Market with a Criminal Record," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number nsc.
    7. Martin, Allison & Wright, Emily M. & Steiner, Benjamin, 2016. "Formal controls, neighborhood disadvantage, and violent crime in U.S. cities: Examining (un)intended consequences," Journal of Criminal Justice, Elsevier, vol. 44(C), pages 58-65.
    8. Magnus Lofstrom & Steven Raphael, 2016. "Crime, the Criminal Justice System, and Socioeconomic Inequality," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 103-126, Spring.
    9. Andrew Foote, 2015. "Decomposing the Effect of Crime on Population Changes," Demography, Springer;Population Association of America (PAA), vol. 52(2), pages 705-728, April.
    10. repec:kap:atlecj:v:45:y:2017:i:2:d:10.1007_s11293-017-9544-8 is not listed on IDEAS
    11. Munyo, Ignacio & Rossi, Martín A., 2015. "First-day criminal recidivism," Journal of Public Economics, Elsevier, vol. 124(C), pages 81-90.
    12. Aaron Chalfin & Justin McCrary, 2017. "Criminal Deterrence: A Review of the Literature," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 5-48, March.
    13. Derek Neal & Armin Rick, 2016. "The Prison Boom and Sentencing Policy," The Journal of Legal Studies, University of Chicago Press, vol. 45(1), pages 1-41.
    14. Mueller-Smith, Michael & Schnepel, Kevin T., 2016. "Avoiding Convictions: Regression Discontinuity Evidence on Court Deferrals for First-Time Drug Offenders," Working Papers 2016-16, University of Sydney, School of Economics.
    15. Thomas J. Miles & Adam B. Cox, 2014. "Does Immigration Enforcement Reduce Crime? Evidence from Secure Communities," Journal of Law and Economics, University of Chicago Press, vol. 57(4), pages 937-973.
    16. O’Flaherty, Brendan & Sethi, Rajiv, 2015. "Urban Crime," Handbook of Regional and Urban Economics, Elsevier.
    17. Derek Neal & Armin Rick, 2014. "The Prison Boom and the Lack of Black Progress after Smith and Welch," NBER Working Papers 20283, National Bureau of Economic Research, Inc.

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